8 Proven Investing Secrets You Should be Using Today

8 Proven Investing Secrets You Should be Using Today

You May Wish to Stop Investing Unless…

You Use These 8 Proven Investing Secrets!

Chances are that you have read Rich Dad Poor Dad – or at least have heard about it.

If you’ve read the book, you probably have the desire to take control of your financial
future and start to use your time and money differently.

But you may not know where to start.

This Rich Dad Guide is designed to help you get started investing and to help you be
as successful as possible.

We’ve prepared 8 powerful strategies that you can use right away. You might even call
these, Secrets of Successful Investors.

Of course, these eight secrets won’t teach you everything you need to know in order
to become a successful investor. Far from it. But they’ll start you down the down the
right path.

The rest is up to you, but we are confident you can do it.

Let’s get started…

Secret No. 1. You Invest with Your Mind

Let’s begin with Robert Kiyosaki himself. Robert offered a group of investors this insight
online, and it set off a firestorm across the Internet, evoking a wide array of thoughts
from people around the globe.

Most people who responded were intrigued. Many were encouraged. And a few others
were even infuriated. But that’s OK. The truth often hurts—especially for people who’ve
ignored the truth and failed.

Here’s what Robert said: “I’m often asked how to start investing with little or no money.
Please hear this, as this is the hardest thing for people to understand: you do NOT
invest with money! You invest with your mind!”

Your mind? Really? Truth.

Robert went on, explaining that, “No matter what the field, your biggest asset is
your mind. Once you have knowledge, you find deals, find your team, and use other
people’s money. You sell the deal and your team to get investment money.”

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So that’s rule number one in investing: before you even think about starting to invest,
use your mind. Specifically, acquire the knowledge you need in order to become a
successful investor. Never invest a dime if you don’t know exactly what you’re doing.
Because it’s a lot easier to keep the money you have than to get it back after you’ve
lost it.

But how do you acquire that knowledge? The best advice is to get yourself into a good
coaching program, right away. As you can probably guess, there are literally millions
of pages of advice out there where you can read about investing…the problem is that
most of it is for people who only aspire to be middle-class not rich. A good coaching
program can give you the background you need so that sifting through the good and
the bad becomes second nature to you.

So that’s where to start: invest with your mind.

Secret No. 2. Invest Only in Assets

So you want to make money, right? If that’s the case, the second secret to successful
investing is a no-brainer. Invest only in those things that will make you money.

Just plain common sense, right? Except that it’s a piece of common sense that the
vast majority of people who call themselves “investors” don’t follow.

Not so “common,” after all.

Robert wrote a book called Rich Dad, Poor Dad. Perhaps you’ve heard of it. Maybe
you’ve even read it. If you have, then you’ll probably remember the main lesson he
taught in that book: buy assets.

That’s it. If you’re going to invest, invest in assets.

But what’s an asset? Drill this into your mind: an “asset” is anything that makes
you money.

It’s that simple.

But not to most people. If you ask the average person—even the average investor—to
list their assets, you’ll probably hear “assets” like their home, their car, jewelry locked
up in a safe, a savings account, maybe even shares in a mutual fund.

Assets. Really? And how much money have those things made for you lately?

Most of what people call “assets”—like their personal residence or their cars—actually
cost money, not make it. And when you take inflation and periodic losses into account,
even so-called “assets” that theoretically make money, like savings accounts and
mutual funds, actually wind up losing rather than making money.

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That’s one of the main reasons most investors wind up losing money. They don’t invest
in assets.

Again, it’s that simple.

Secret No. 3. Invest for Control

Naturally, once you’re encouraged to invest in assets, the next questions come in a
flurry. How do I know something’s an asset? Which assets should I invest in? How can I
be sure a given asset will make me money?

And then the granddaddy of all the questions. How can I find an asset to invest in that
isn’t risky?

While investing is risky, most investment risk doesn’t come from the investment itself.
It comes from the investor. One of the first principles you’ll learn in a good investment-
coaching program is this: there are effective ways to minimize your risk. It is called
financial education. In other words, while investing may be risky, you don’t have to be
risky as an investor.

It’s not the “Securities and Guarantees Commission.”

Investing is risky, period. But one of the first principles you’ll learn in a good investment-
coaching program is this: there are effective ways to minimize your risk. In other words,
investing may be risky, but you don’t have to be risky as an investor.

Here’s an insightful quote from Robert that a lot of people find befuddling. “Investing is
less risky,” he says, “than being an employee.” That’s right. Not only are sedentary desk
jobs hazardous to your health. They can also be hazardous to your wealth as well.

Here’s why. No matter what job you have—unless you’re a single proprietor or the
head of the company—you don’t control your fate. Typically, you can be fired or let go
at any time.

Don’t believe it? Just ask the fellow down the street you got “downsized” last month?
Or your friend whose job was just outsourced to India.

But wait a minute. Why are we talking about jobs when you’re here to read about
investing? One reason: the same principle holds for most types of investing as well.

Take a “buy and hold” strategy when it comes to stocks, for instance. Now there’s an
example of a really risky investment. Why? Because you have very little control over the
earning power of your stocks. The value of stocks sway in the stock market like palm
trees in a hurricane.

Sometimes, it’s possible to make a profit with investments like that. A lot of people do,
at least for a time. But usually, any profits they make are as much the result of luck—
often, more so—as they are skill.

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If you like to gamble like that, fine. But if so, you might want to just head to Vegas. At
least there’s great entertainment to make up for the money you’ll probably lose.

On the other hand, if you don’t want to gamble, remember this advice: invest for
control before you invest for profit. That control—found in an ability to make money
when stocks are going up OR going down—will give you the profits you’re seeking
more often than not.

Also, consider real estate—Robert’s favorite type of investment. Say you purchase an
apartment building downtown. Now, you own the building. You control the pricing. You
write the lease agreements. You manage the repairs. You do the marketing and find the
tenants. Even the growth of the market is fairly predictable.

That’s the kind of control we’re talking about.

Secret No. 4. Use Other People’s Money

There’s one step above all others that can minimize your investing risk. And this is it:
invest using other people’s money.

Yes, you heard right. Don’t invest your own money if you can help. Invest other
people’s money.

Other people’s money? you might ask, thinking we’ve gone just a little crazy. How can I
get other people to give me their money to invest?

Actually, it’s not really that hard.

Professional investors understand that there are four types of money:

• Your money
• The bank’s money
• The tax collector’s money
• The house’s money

Like professional gamblers, professional investors want to quickly get to the point
where they’re “playing the game” with house money—other people’s money (OPM)—as
soon as possible.

Spelled out in more detail, the OPM investing process works like this:
1. Invest your own money into an asset
2. Get your money back
3. Keep control of the asset
4. Move your reclaimed money into a new asset
5. Get your money back again
6. Repeat the process as often as you can

Robert refers to the speed with which this recycling process takes place as the
“velocity of money.” Having a high velocity of money is one reason why the rich
get richer…while the average investor usually gets nowhere.
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Secret No. 5. Be Able to Evaluate Risk & Reward

Another important way to minimize your investment risk is to become skilled at
evaluating your potential risk and reward. This is another area where knowledge and
experience—like that gained from training and coaching programs—are vital, because
evaluating risks and rewards is not always easy to do.

The first step in properly evaluating potential risks and rewards is taking your emotions
out of the equation. Money doesn’t have feelings. Investments don’t have good-hair
days or bad-hair days. Ultimately, money and investments are just numbers.

Numbers can be calculated and assessed. You can compare numbers with one
another, and then you can choose the numbers that are most likely to be favorable to
your financial position.

But you can do that accurately only if you give your emotions the day off.

The rewards are the area where emotions often play the greatest role. For instance,
many investors like to jump on a bandwagon. If a particular stock is “cool” or has been
performing well, then why not join the crowd?

There’s a very good reason for not following the crowds in this way. If a stock is well-
known or has made a lot of money recently, the party is often already over, the cake is
gone, and all that remains are scraps. No matter how good the investment sounds.
You don’t get rich off scraps.

Or if you see a property that has so much charm you wish you could move in
yourself—never mind that it’s sat unoccupied for the last year.

So the first step you need to follow when investing is to take a cold, hard, realistic
look at your potential rewards. And then, once you’ve done that, ramp down your
expectations even further. Make sure that only the cream of the investments float to
the top.

The same principle applies when evaluating risk. For one thing, especially when
you’re just starting, never invest more than you can afford to lose. Never. Because no
investments—even the most seemingly attractive ones—are sure things.

And then, turn a cold, hard eye to the potential risks as well. Don’t just ask what the
upside is. Ask what the downside is, too. When you determine the downside, how does
it make you feel? If it sends shivers down your spine, it’s probably best to move on.

Yes, it’s sometimes fine to take on more risky investments, especially if the realistic
return is high enough. Sometimes, risky investments can turn out to be the most
profitable. But even then, follow that course only if you can afford to lose everything
you’re investing.

On the other hand, don’t let your fears take over either. If a realistic analysis shows that
the chances of winning are much greater than losing, then you’ve probably found a
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good investment—even if the risk is relatively high.

Secret No. 6. Be Prepared for Whatever Happens

How many times have you heard a story like this one? An investor says, “I could have
bought that land for $500 an acre 20 years ago. Now look at it. Someone built a
shopping center right next to it, and now that same land is worth $500,000 an acre.”

We’ve all heard such stories. They’re unfortunate, yes. But more than that, they
represent cases of people who weren’t prepared.

The fact is, most investments that will make you rich are available for only a brief period
of time. And if you aren’t prepared with education and experience—and also with the
cash in hand—great opportunities like this will pass you by.

So how do you prepare? Just as in any field of endeavor, you need to learn what to
focus on and then actually focus on those things.

For instance, if you want to buy stocks, attend classes on how to spot bargains in
stocks and how to take advantage of them. If you want to invest in real estate, same
thing: attend classes on how to spot bargains in real estate and how to take advantage
of them.

Success in investing all begins with training your brain to know what to look for, and
being prepared for the moment the investment is presented to you.

Thought of in this way, investing is a lot like the sport of soccer. You practice and
practice, and play and play, and then—all of a sudden—the winning kick at the goal
presents itself. You’re either prepared, or you’re not. You’re either in position, or you’re
not.

But even if you miss a shot in soccer or a great investment opportunity in the market,
there’s always another shot at the goal or another “investment opportunity of a lifetime”
right around the corner. Great investments are like buses—even if you miss one, there’s
already another one on the way.

But if you’re not at a bus stop, or if you don’t even know what a bus looks like, then
you’ll probably never climb aboard.

So short and simple: if you want to succeed in investing, be prepared.

Secret No. 7. If You’re Prepared, the Money Will Find You

Why do successful investors always seem to find the best deals? Part of the answer is
that they’re prepared. But there’s more to it than that.

If you’re prepared—meaning that you have the education and experience you need,
and you know what to look for—and a good deal appears, either the money will find

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you or you will find the money.

It’s law of nature: good deals attract cash, almost always. But if a deal is bad, then
raising money is going to be really hard.

Of course, not all good deals find the cash they need, but there’s a reason for that as
well. Sometimes, even if a deal itself is great, the people controlling the deal aren’t.

Imagine this: you’ve just spent a million dollars for a world-ranked racecar. But the car
comes with a mediocre driver. How many races are you going to win? Probably not
very many. But that isn’t the car’s fault. You just chose a car with the wrong driver.

In real estate, people often say that the key to success is location, location, location.
But that’s only partly true. In reality, in the world of investing—whether it’s real estate,
businesses, or paper assets—the real key to success is people, people, people.

Some of the best business ideas have failed because the wrong people were in charge.
And some of the best real estate locations have often lost money for the same reason:
the wrong people were in charge.

What’s the lesson here? When you’re investing, be educated and experienced enough
that you can look not just for great deals, but for great people behind the deals as well.

And if you can do that—if you’ve truly got a great deal and great people behind it—the
money will find you. You can take that one to the bank.

Secret No. 8. Understand That You Are the Asset or Liability

We mentioned a moment ago that many potential investors are scared off because
investing is risky. But it’s not so much that investing is risky. More often than not, it’s the
investor who’s risky.

If you’re unprepared, if you don’t really understand the basics of investing, if you’re
just blindly listening to the advice of people you don’t even know, then, yes, your
investments will be very risky.

But if you’re prepared, if you’ve acquired the foundation of knowledge and experience
you need, if you’re in control of your investments, and if you’re committed to continuing
to learn for the rest of your investing career, then investing can become almost a sure
thing.

These principles are borne out in practice every day. Many so-called investors are
continually losing money while others are becoming rich. Profitable businesses are sold
to a new owner, and almost immediately they start going downhill. Certain people buy a
money-making piece of real estate, and in a few years, that same piece of real estate is
running at a loss and falling apart.

But let’s not be too hard on risky investors—because risky investors often produce the

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best investment bargains. They messed up, and they want out. So you go in, find out
what they did wrong, and the fix it. Big profits almost always follow.

But doing that takes discernment—that’s the key. You need to be able to see not just
what’s before your eyes, but what a given investment can be like, a few years from
now.

Being able to do that will make you an asset as an investor instead of a liability.
On the other hand, not every bargain is really a bargain. An investment will turn out
to be worthwhile only if it can be fixed and only if other investors want it fixed. If a
business can’t be turned around with the right managerial skill, or if a real estate
property can’t be rehabilitated, or if no one would want them even if these things
happened, then you don’t want them either.

Being able to correctly make that kind of judgment will also turn you into you an asset
as an investor instead of a liability.

And hear this: if you’re an asset as an investor, then your investments will very likely
become assets as well.

The Bottom Line

As the investing experiences of Robert and the rich have demonstrated time and again,
the ideas outlined here are truly proven secrets to successful investing. But as written,
they’re just that: ideas. The only way these ideas can transform both your investing
career and your life in the way we’ve described is if you put them into practice.

And the only way to truly put these ideas into practice is to learn everything you can so
that you can master the fundamentals—and then build on those fundamentals every
day of your life.

So don’t delay getting started. A lifetime of successful investing awaits, beginning now.

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