Rich Dad investing

Question 0

What is a sophisticated investor?

Answer 0

As opposed to an accredited investor a sophisticated investor knows the three E’s. Education, Experience, Excess Cash.

Question 1

How does the rich investor differ in mind set from the average investor?

Answer 1

The rich investor needs to think about how to take on more debt, risk and so forth. The rich investor sees both sides of the coin. The rich investor is happy when the market crashes, where the average investor fears it.

Question 2

How will you know you have enough education and experience?

Answer 2

When you have an excess in cash.

Question 3

What’s even tougher than making the first million?

Answer 3

Keeping it.

Question 4

What are some of the sophisticated investments for the rich? What makes them too risky for the average investor?

Answer 4

Private placements.
Real estate syndications
IPO's
Sub-Prime loans.
Hedge funds.
Venture Capital Investments.

Too risky for lack of excess cash for average investors.

Question 5

What are the 5 phases to become a sophisticated investor?

Answer 5

1. Are you Mentally prepared to be an investor?
2. What type of investor do you want to become?
3. How do you build a business?
4. Who is a sophisticated investor?
5. Giving it back.

Question 6

What does it mean to be part of the revolution?

Answer 6

The shift from the Industrial Age to the Information Age. There is nothing as powerful as an idea which’s time has come.

Question 7

What is the proper state of mind to be successful with money?

Answer 7

Money will be whatever yo want it to be.

Question 8

What is the only reason to buy businesses?

Answer 8

So the business can buy the assets for you.

Question 9

What does it mean to operate in the “b” and “I” quadrants in terms of strategy?

Answer 9

Learn to build businesses and then invest through those businesses.

Question 10

What is the first lesson learned in investing?

Answer 10

The rich don’t work for money. They know how to make their money work hard for them.

Question 11

What is he first mental decision to make?

Answer 11

Whether to be rich, poor or middle class.

Question 12

What are the three priorities or core values concerning money and financial planning? And how can this become the downfall?

Answer 12

Security, comfortable or rich. If you look to be secure or comfortable first you may never take the actions and endure the circumstances it can take to become rich. 90 percent may choose comfort and security over being rich.

Question 13

What are the basic problems regarding money?

Answer 13

Some have a problem of too little money and some have a problem of too much money.

Question 14

What is meant by the idea that investing is not a product or procedure, but a PLAN?

Answer 14

Investing is a vehicle that gets you from where you are at now to some point in the (not-too-distant) future. The plan describes how to get from financial point A to financial point B and how the selected vehicles will get you there. The plan of where to get when determines the vehicle. E.g. If you want to get to NY from LA in 24 hrs, your options are limited to the vehicles you’ll be able to use or select.

Question 15

What is the key error in selecting investment vehicle?

Answer 15

Getting attached to only one or a too limited number of vehicle. Or thinking it’s the only or “best” vehicle.

Question 16

What is the object in choosing a vehicle?

Answer 16

Using a correct vehicle to get from financial point A to financial point B.

Question 17

Is it true that it takes money to make more money and financial success. What does it take?

Answer 17

No. It takes increasing your financial vocabulary in specific subject areas.

Question 18

What’s the best Rich Dad way to increase vocab?

Answer 18

Playing the cash-flow game.

Question 19

How can you predict a person’s financial present, past or future?

Answer 19

Listen to the words they use. Are they positive, survival ?

Question 20

What is the primary error in investing?

Answer 20

The failure to make money.

Question 21

What is investing really?

Answer 21

A plan, often a dull, boring and almost mechanical plan of getting rich. A plan that almost guarantees getting rich. Follow the formula, plan. It can be so boring that the process is abandoned easily.

Question 22

What’s the basic formula for getting rich.

Answer 22

Buy 4 green houses, then exchange them for a red hotel.

Question 23

What is the classic book on investing?

Answer 23

James P o’shaughnessy, “what works on Wall Street, the classic guide. Another title is Fortune and Folly.

Question 24

What are the stable data regarding investing?

Answer 24

A mechanical effort to investing stocks wins over individual reason.
Simple works over complex formulas. Professionals, institutions make same error as individuals.
Find a long term strategy performs not stock.
History does repeat itself.
The longer time period is most reliable.

Question 25

What’s the short, simple but certain strategy for investing?

Answer 25

Find a formula that works and stick with it.

Question 26

What are the steps of a plan?

Answer 26

Think quietly. Think what do I want out of this gift of life. Call a professional for financial advice. Someone who has done what you want to do. Insurance is an important product to consider, against financial risk. Keep that up to date. Find an adviser like and change adviser when you outgrow them. Ask for their qualifications and what they had accomplished. Start with realistic goals and then improve upon them.

Question 27

What is meant by investing is a team sport?

Answer 27

A banker, accountant, lawyer, broker, bookkeeper, insurance agent, successful mentor. Consider them partners. Regardless of what you do, mind your own business.

Question 28

What is the real value of money?

Answer 28

To exchange for a valuable. Money itself has no value unless it’s exchangeable.

Question 29

How is money best valued?

Answer 29

By investing the proper time to study out your investments. The more secure an investment the more time it may take.

Question 30

Why is investing not risky? What are the first steps to reduce risk?

Answer 30

Most people invest from the outside, but one should be on the inside as well as on the outside. One should be closer to the inside than most professionals are. To do that you have to spend more time than the average professional to get to the “inside”. It’s the business behind the business.

Question 31

What is investing rule #2

Answer 31

Convert ordinary income into passive income or portfolio income.