Unfair Advantage

What school will never teach you about money

-Remember, gold is not a good investment if you are a bad investor. Nothing is a good investment if
you are a bad investor. In this book you will find that the more financial education you have, the
more money you make, the less you will pay in taxes, and your returns will go up as your risk goes
down.

-What you invest in—whether it’s business, real estate, paper assets, or commodities—is not as
important as your investment in yourself. If you are a fool, you will probably lose no matter what you
invest in.

-With the World Wide Web, anyone living anywhere can gain enormous wealth in the world
economy. All they have to do is adopt new ideas, be serious about their financial education, and take
action.

-Taking action is important because we learn by our mistakes.

-The idea that mistakes are bad is a bad idea. If people do not make mistakes, they fail to learn,
which is why my poor dad remained poor. Rather than look at the loss of his job, the election, and his
ice cream business as blessings, he looked at his failures just as a school teacher would and punished
himself for making mistakes. He died a poor man, not realizing that his failures were his biggest
opportunities to learn and to grow. 

-You see, in school, students who make the most mistakes are labeled stupid. In the real world,
people who make the most mistakes and learn from them, become smarter people.

-This book is merely a guide, not an answer book, because in the real world there are no right
answers. There are only answers that work for you.

-It is time we set people free. Financial education can do that. Good luck reading this book, and may
you gain more knowledge, because knowledge is real money

-In 2007, as the news of the subprime crisis spread

-portfolio; scheme

-If you are not smart, a lawsuit can take most of your hard-earned money. Before you make your
money, you need to learn how to protect it.”

-If our plan did not work, we were still young enough to correct and rebuild our investment base.

-Like my rich dad, the game does not give you answers. The game challenges you to think.

-It was the same “pressure tested” formula that worked in good times and bad, when we had very
little money and when we had a lot of money.

-“Money does not make us rich. Knowledge does.” This is the power of real-life financial education
and why knowledge is an unfair advantage.
-She did not have the money, but she knew how to raise the money. The only change in the process
is the number of zeros: $45,000 versus $46,000,000.

-What increased was her financial education. Her real-life financial education was a long-term
process of classes, seminars, study, reading, successes, failures, good times, bad times, crooks, con
men, liars, cheats, mentors, bad partners, and great partners. As her knowledge increased, her
confidence increased, risk went down, and the size of her investments increased. This is her unfair
advantage today, and why she is qualified to write her book, Rich Woman, to encourage other
women to take control of their financial future by gaining real-life financial education.

-1. Four green houses, one red hotel The lesson is: Start small. Dream big. We both took classes and
did small deals on weekends. We had a rule: We had to look at 100 properties before we bought one.
With every deal we looked at, especially the bad ones, we got smarter. As you may know, most
investments are bad investments, so you need to invest time looking for those rare great deals.

-Give yourself at least five to ten years to learn and gain from experience. If you like real estate, start
with real estate. If you like stocks, start with stocks. If you are interested in business, start in
business. Know that you will make mistakes, so make small mistakes, learn, and keep dreaming big.

-A person who invests for capital gains is gambling, always worried about the ups and downs of the
market. That is why so many investors believe investing is risky. Anything is risky when you have no
control.

-True financial education teaches you how to have people send money to you.
-We invest in investments that require people to send us money, good economy or bad.

-After the crash, consumers still use oil whether the price of oil is up or down. When inflation hits and
prices go up, we will still make more money.

-Every year, Robert and I get together to set our goals. We have our business goals, fitness goals, fun
goals, and our asset goals. We want to be sure that each year we add more assets to our asset
column. The assets may be businesses, real estate, paper assets, or commodities.

-That same year we set our first asset goal. Our goal was to acquire 20 rental units in ten years, or
two rentals per year. This was our first smaller goal on the way to our main goal of being financially
free. The power of setting the goal is that it is specific and we are crystal-clear on what we want.
Setting the goal puts us in motion toward achieving it. The reality is that, once we started toward that
goal, my knowledge about real estate investing increased dramatically because I loved it and I was
excited about it. I was even more excited about the cash flow that these properties would generate.
The fact is that, instead of taking 10 years to reach our goal, we had our 20, actually 21, rental units
in 18 months!

-As a couple, what is our unfair advantage? First, we set our financial goals together. Second, we
study and we learn together in order to achieve the goals we’ve set. We attend seminars, read books,
meet with real experts, and work with coaches so that we get what we want in life.

-FAQ So what should I invest my money in? Answer We all have three choices: 1. Do nothing and
hope things work out. But as my rich dad said, “Hope is for the hopeless.” 2. Turn your money over to
an expert for the long term, and “Buy, hold, and pray.” 3. Invest in your financial education. Invest
your time before you invest your money. That’s something you have already done by reading this far.
To me, this is the smart thing to do.
-The ability to raise capital is the most important skill of an entrepreneur. The inability to raise capital
keeps most small businesses small.

-If you have played our CASHFLOW game, you may have noticed that the investment opportunities
vary between capital-gains and cashflow investment deals. A smart investor knows the difference,
not only because of risk, but also for taxes.

-A subtle, yet important lesson designed into the CASHFLOW game is how to convert ordinary
income into portfolio or passive income. The next time you play CASHFLOW, notice the conversions
of income. Many people miss this important lesson.

-Again, our objective is cash flow and tax advantages.

-Hot money looks for people and institutions that can borrow more and more money. Ever since
1971, the world economy cannot grow unless people borrow money.

-Most people are standing next to this massive ocean of money, afraid to jump in because they never
learned how to swim.

-The unfair advantage is the knowledge to use debt to acquire assets, assets that produce cash flow
for an infinite return—and to know not to save money, because money is no longer money. Money is
now debt, and that is why savers are losers.

-This is one reason that the next oxymoron, save money, is ridiculous. Why save money when
countries are weakening their money, making money less valuable and shopping at Walmart more
expensive?

-Obviously, charts are always changing as the economy changes, which is why a course on technical
analysis is essential.

-What Is Risky? E’s and S’s believe investing is risky because they have limited, if any, financial
education about assets in the asset column. Investing is not risky. A lack of financial education is very
risky. B’s and I’s focus on assets which teaches them to manage assets and reduce risk.

-I never did well in English in school because I could not write. I still do not write well. Yet, as stated
in Rich Dad Poor Dad, I am not a “best-writing” author. I am a best-selling author. Rich dad often said,
“Sales equals income.” If you want more income, learn to sell.

-In 1973, I took my first real estate sales course. Today, Kim and I are tens of millions of dollars in
debt, debt that produces millions in income, much of it tax-free. In the past year, banks have lowered
interest rates which reduces our mortgage payments and increases our profits. Real estate is great
because debt and taxes make the investor rich.

-Remember, a business creates most of the truly wealthy people, but a business takes the most
financial education. Real estate requires the second-highest financial education. Paper assets are
easy to get into, but are the riskiest. Commodities like gold and silver take the least financial
education but are not risk-free.

-There are some horrible and stupid financial advisors in the real world. But if you do not know good
advice from bad, any advice will do.

-Robert often mentions the importance of taking a class to learn basic technical analysis. It’s the term
we use to look at the ups and downs of markets. It’s one of the things we can get somewhat familiar
with by playing the CASHFLOW 202 game.
-A good reputation is also an unfair advantage.

-Your home is not an asset. You are the asset. Every month, homeowners send checks to the bank,
tax department, insurance, and utility companies.

-No one has ever asked: “What is the mission of this company?” “What problem is the company
solving?” “What can I learn from working here?”

-To qualify to teach at the new academy, the instructors would have to be real entrepreneurs,
trained to teach and willing to teach for free. If they are really entrepreneurs, they would have the
time and not need the money.

-Rich dad often said, “You will never know true freedom until you achieve financial freedom.” By this,
he meant that learning to invest is more important than learning a profession. He said, “When you
learn a profession, let’s say to be a doctor, you learn how to work for money. Learning to invest is
learning how to have money work for you.

-Smart investors understand taxes before investing.

-The reality is that real investors do not park their money. They move their money. It is a strategy
known as the “velocity of money.” A true investor’s money is always moving, acquiring new assets,
and then moving on to acquire even more assets. Only amateurs park their money.

-As long as you have more cash flowing in than flowing out, your investment is a good investment.

-Many people believe it is smart to save money. The problem is that today, money is no longer
money. Today, people are saving counterfeit dollars, money that can be created at the speed of light.

-In 1971 President Nixon took the U.S. dollar off the gold standard, and money became debt. The
primary reason why prices have risen since 1971 is simply because the United States now has the
power to print money to pay its bills. Today, savers are the biggest losers. Since 1971, the U.S. dollar
has lost 95 percent of its value when compared to gold. It will not take another 40 years to lose its
remaining 5 percent.

-Remember, in 1971, gold was $35 an ounce. Forty years later, gold is over $1,400 an ounce. That is a
massive loss of purchasing power for the dollar. The problem grows worse as the U.S. national debt
escalates into the trillions of dollars, and the United States continues to print more counterfeit
money.

-As the Federal Reserve Bank and central banks throughout the world print trillions of dollars at high
speed, every printed dollar means higher taxes and more inflation. In spite of this fact, millions of
people continue to believe that saving money is smart. It used to be smart when money was money.

-The bond market is the biggest market in the world, bigger than the stock market or the real estate
market. The main reason it is the biggest is because most people are savers, Level 2 investors.
Unfortunately, after 1971 when the rules of money changed, savers became the biggest losers, even
if they saved money by investing in bonds.

-There are legal Ponzi schemes and illegal Ponzi schemes. Social Security is a legal Ponzi scheme, as is
the stock market. In both instances, the scheme works as long as new money flows into the scheme.
If new money stops flowing in, the scheme—be it Madoff’s scheme, Social Security, or Wall Street—
collapses.
-The S-quadrant investor is often a solo investor. (S also stands for smartest.) The B-quadrant
investor invests with a team. B-quadrant investors do not have to be the smartest. They just have to
have the smartest team. Most people know that two minds are better than one. Yet, many S-
quadrant investors believe they are the smartest people in the world.

-The reason I started this book with the story of Kim and me being homeless is to let readers know
that not having any money is not an excuse for not growing smarter, thinking bigger, and becoming
richer.

-There is nothing wrong with being deeply in bad debt, unless you do nothing. After I lost my first
business, I was nearly a million dollars in debt. It took me almost five years to reach zero. In many
ways, learning from my mistakes and taking responsibility for my mistakes was the best education I
could have asked for. If I had not learned from my mistakes, I would not be where I am today.

-The risk in saving is that you learn little. And if your savings are wiped out, either by market decline
or devaluation of the money supply, you wind up without money and without education.

-I encourage you to look at the five levels of investors and make your choice. Each level has its pros
and cons, its advantages and disadvantages. Each level has a price greater than money. P 119

-In my world, ROI stands for a “Return On Information.” This means that the more information I
have, the higher my returns—and the lower my risk.

-One of the reasons that I have so much money today is simply because I was educated and trained
to think differently. If you have read Rich Dad Poor Dad, you may recall that the title for chapter one
of the book is, “The Rich Don’t Work For Money.” One of the reasons why those in the E and S
quadrants have problems with that statement is because most went to school to learn to work for
money. They did not go to school to learn how to have other people’s money work for them.

-When Kim and I started The Rich Dad Company, we borrowed $250,000 from investors. We paid the
money back once the company was up and running. Today, the business has returned multi-millions
of dollars, not only to Kim and me, but to companies and individuals associated with Rich Dad. As I
said, capitalists are generous

-Remember this about the word “education”: Education gives us the power to turn information into
meaning. In the Information Age, we are drenched with financial information. Yet, without financial
education, we cannot turn information into useful meaning for our lives.

-I am very proud of my sister. She may be a nun by profession, but she does not have to be a poor
nun.

-Warning Anyone with the goal of becoming a Level-5 Investor must develop their skills FIRST as a I
stands for investor, those who understand the art and science of raising capital. When you can build
a business in the B quadrant and raise capital, you are a capitalist.Level-4 investor. Level 4 can’t be
skipped on your path to Level 5. Anyone who tries to do this is really a Level-3 investor—a gambler!

-In my opinion, entrepreneurship requires the highest level of financial education. Entrepreneurs are
also the richest people in the world.

-I also recommend technical investing, such as our course which teaches futures and commodities
trading, because all markets go up and down and all markets have a past, present, and a future. My
financial education never stops because my financial education is my unfair advantage.
-I did not hire a coach just for health. My health is important, but not as important as my life with
Kim. She makes my life worth living and I want to enjoy this gift of life with her in great health.

-From the B/I perspective, the business is far more important than the product. The product is just a
product. The business is the asset.

-I stands for investor, those who understand the art and science of raising capital. When you can
build a business in the B quadrant and raise capital, you are a capitalist.

-I recommend starting in the S quadrant, then moving to the B, and then the I quadrant. It is the
same process as a baby learning to stand, then walk, then run.

-Your true unfair advantage is to use your financial education to be generous. Use your financial
education to solve your own financial challenges and the financial challenges of others.

-Learn more so you can do more. Focus on doing more with less, and enriching the lives of others.

-Your job is to use your unfair advantages to put the power of financial education to work in your life.
First change yourself. Then change the world.