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Financial Intelligence - Investing Tips By Robert Kiyosaki

Updated on February 18, 2012

Money Management

Money is an important part of our lives. Most of us trade our time for dollars. We sometimes choose our careers based on the income potential the career offers. Whatever we learn in schools and colleges might not be useful in our daily life. But we never learn about money management and investment skills, which we use on a daily basis. We get our financial education mostly from our parents and observing other people around us. If our parents don’t have good financial management habits, unfortunately we learn the same bad habits. We don’t realize this until we are in deep financial trouble.

Below are some of the investing tips offered by Robert Kiyosaki who authored Richdad book series. If you need more information, read Richdad poordad, Cashflow Quadrant, Increase your financial IQ and Richdad guide to investing books by him. I thoroughly enjoyed reading Robert Kiyosaki’s books and learned a wealth of information.

Below are some of the points I jotted down while reading. Read these tips below from Richdad Guide to Investing by Robert Kiyosaki and use them in your life. Your financial intelligence will be vastly improved.

Investing tips of Robert Kiyosaki

It is the direction of the cash flowing that determines if something is an asset or a liability at that moment. An asset puts money in to your pocket. A Liability takes money from your pocket.

Investment is not risky. It is the investor who is risky.

Investing is not a race. You are not in competition with anybody else. All you need to do to make more money is to simply focus on becoming a better investor.

There was risk in driving the car. But driving the car with hands off your steering wheel is really risky. When it comes to investing, most people are driving the car hands off the steering wheel.

Three kinds of income:

Earned income: from a paycheck (highest taxed income)

Portfolio income: generally derived from stocks, bonds, mutual funds etc.

Passive income: income generally derived from real estate

Convert earned income into Passive income or portfolio income as efficiently as possible

The true investor is prepared for whatever happens. A non-investor tries to predict what and when something will happen

How do you prepare? You need to focus and keep in mind what other investors are already looking for. If you want to buy stocks, then attend classes on how to spot bargain stocks. The same is true for real estate. It all begins by training your brain what to look for and being prepared for the moment investment being presented to you.

If you are prepared, which means you have education, experience and find a good deal, the money will find you or you will find the money. When a person finds a good deal, the deal attracts the cash. If it’s a bad deal, it is hard to raise cash.

Reduce risk through financial literacy. Learn to read financial statements. Most people cannot. Financial literacy is one of the important investor basics, especially if you want to be a safe investor and inside investor and rich investor. Anyone who is not financially literate cannot see into an investment. Just like the doctor uses an X-ray to see inside the skeletal system, a financial statement allows you to look into an investment and allows you to see the truth, the facts, the fiction, the opportunities and the risk. Reading a financial statement of a business or individual is like reading biography or autobiography. It provides a checklist of what is important. It tells what is functioning well. Remember investing is a plan. Finally the financial statement tells you if the investment is safe and will make you money. If you didn’t understand these factors, it would be risky.

Remember that your expenses are some one else’s income. People who cannot control their cash flow make the people who control the cash flow rich.

Investor controls. Everyone else gambles.

The rich are rich because they have more control over their money than poor and middle class. The moment you understand that the game of money is the game of control, you can focus on what is important in life - which is not making more money but gaining more financial control.

The poor and middle class focus on earned income. The rich focus on portfolio income.

To become an entrepreneur, never take a job for money. Take a job only for the long- term skills you learn.

Education in school is good. But education on the street is better.

The mission of the business is the reflection of the spirit of the entrepreneur

Business is a team sport. Investing is also a team sport

A leaders job is to bring out the best in people. Not to be the best person.

If you are the smartest person in your business team, your business is in trouble.

How do you gain leadership skills? Volunteer more! In most organization, it’s hard to find people who want to lead. Most people want to hide, so no one will call them.

With right mission, team and leader, money will follow.

Financial literacy allows you to read the numbers and the numbers will tell you the story of the business based on facts.

Cash flow is to the business what blood is to the human body. Nothing impacts business more dramatically than not being able to run payroll on Friday.

The better at communicating you are, the more people you communicate to and the better your cash flow will be.

To be good at communications, you first need to be good at human psychology. You never know what motivates people. Just because something makes you excited, doesn’t mean it makes others excited. To be good at communication, you need to be good at pushing buttons. Many people are talking, but only few are listening.

The world is filled fabulous products, but the money goes to the best communicators.

If want to be a leader, you need to be a speaker.

The difference between sales and marketing

If a business has strong convincing marketing, the sales come easily. Sales is done one-on-one. Marketing is sales done via a system. To be a business owner on the B side, you need to learn how to sell through a system, which is called marketing and the 3 key ingredients to that system are identifying a need, providing a solution and answering customers questions and what’s in it for me?

Human body is system of systems so was a business. A business is a complex system of inter-operating systems.

To become rich, you must teach yourself to think like a rich person


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