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Rich Dad’s Guide to
Investing
By Robert T.
Kiyosaki
Sample Pages
INTRODUCTION
PHASE ONE
Are You Mentally Prepared to Be an
Investor?
CHAPTER 1
What Should I Invest In?
CHAPTER 2
Pouring a Foundation of Wealth
CHAPTER 3
Investor Lesson #1
The Choice
CHAPTER 4
Investor Lesson #2
What Kind of World Do You See?
CHAPTER 5
Investor Lesson #3
Why Investing Is Confusing
CHAPTER 6
Investor Lesson #4
Investing Is a Plan, Not a Product or
Procedure
CHAPTER 7
Investor Lesson #5
Are You Planning to Be Rich or Are You
Planning to Be Poor?
CHAPTER 8
Investor Lesson #6
Getting Rich Is Automatic…If You Have a
Good Plan and Stick to It
CHAPTER 9
Investor Lesson #7
How Can You Find the Plan That Is Right
for You?
CHAPTER 10
Investor Lesson #8
Decide Now What You Want to Be When You
Grow Up
CHAPTER 11
Investor Lesson #9
Each Plan Has a Price
CHAPTER 12
Investor Lesson #10
Why Investing Isn’t Risky
CHAPTER 13
Investor Lesson #11
On Which Side of the Table Do You Want
To Sit?
CHAPTER 14
Investor Lesson #12
The Basic Rules of Investing
CHAPTER 15
Investor Lesson #13
Reduce Risk Through Financial Literacy
CHAPTER 16
Investor Lesson #14
Financial Literacy Made Simple
CHAPTER 17
Investor Lesson #15
The Magic of Mistakes
CHAPTER 18
Investor Lesson #16
What Is the Price of Becoming Rich?
CHAPTER 19
The 90/10 Riddle
PHASE TWO
What Type of Investor Do You Want to
Become?
CHAPTER 20
Solving the 90/10 Riddle
CHAPTER 21
Rich Dad’s Categories of Investors
CHAPTER 22
The Accredited Investor
CHAPTER 23
The Qualified Investor
CHAPTER 24
The Sophisticated Investor
CHAPTER 25
The Inside Investor
CHAPTER 26
The Ultimate Investor
CHAPTER 27
How to Get Rich Quick
CHAPTER 28
Keep Your Day Job and Still Become Rich
CHAPTER 29
The Entrepreneurial Spirit
PHASE THREE
How Do You Build a Strong Business?
CHAPTER 30
Why Build a Business?
CHAPTER 31
The B-I Triangle
CHAPTER 32
Cash Flow Management
CHAPTER 33
Communications Management
CHAPTER 34
Systems Management
CHAPTER 35
Legal Management
CHAPTER 36
Product Management
P HASE F OUR
Who Is a Sophisticated Investor?
CHAPTER 37
How a Sophisticated Investor Thinks
CHAPTER 38
Analyzing Investments
CHAPTER 39
The Ultimate Investor
CHAPTER 40
Are You the Next Billionaire?
CHAPTER 41
Why Do Rich People Go Bankrupt?
PHASE FIVE
Giving It Back
CHAPTER 42
Are You Prepared to Give Back?
I N CONCLUSION
Why It Does Not Take Money to Make
Money…Anymore
Chapter 1
What Should I Invest In?
In 1973, I returned home from my tour of
Vietnam. I felt fortunate to have been
assigned to a base in Hawaii near home
rather than to a base on the East Coast.
After settling in at the Marine Corps
Air Station, I called my friend Mike and
we set up a time to have lunch together
with his dad, the man I call my rich
dad. Mike was anxious to show me his new
baby and his new home so we agreed to
have lunch at his house the following
Saturday. When Mike’s limousine came to
pick me up at the drab gray base BOQ,
the Bachelor Officers’ Quarters, I began
to realize how much had changed since we
had graduated together from high school
in 1965.
“Welcome home,” Mike said as I walked
into the foyer of his beautiful home
with marble floors. Mike was beaming
from ear to ear as he held his
seven-month-old son. “Glad you made it
back in one piece.”
“So am I,” I replied as I looked past
Mike at the shimmering blue Pacific
Ocean, which touched the white sand in
front of his home. The home was
spectacular. It was a tropical one-level
mansion with all the grace and charm of
old and new Hawaiian living. There were
beautiful Persian carpets, tall dark
green potted plants, and a large pool
that was surrounded on three sides by
his home, with the ocean on the fourth
side. It was very open, breezy, and the
model of gracious island living with the
finest of detail. The home fit my
fantasies of living the luxurious life
in Hawaii.
“Meet my son James,” said Mike.
“Oh,” I said in a startled voice. My jaw
must have been hanging open as I had
slipped into a trance taking in the
stunning beauty of this home. “What a
cute kid.” I replied as any person
should reply when looking at a new baby.
But as I stood there waving and making
faces at a baby blankly staring back at
me, my mind was still in shock at how
much had changed in eight years. I was
living on a military base in old
barracks, sharing a room with three
other messy beer-drinking young pilots,
while Mike was living in a
multi-million-dollar estate with his
gorgeous wife and newborn baby.
“Come on in,” Mike continued. “Dad and
Connie are waiting for us on the patio.”
The lunch was spectacular and served by
their full-time maid. I sat there
enjoying the meal, the scenery, and the
company when I thought about my three
roommates who were probably dining at
the officer’s mess hall at that very
moment. Since it was Saturday, lunch on
the base was probably a sub sandwich and
a bowl of soup.
After the pleasantries and catching up
on old times was over, rich dad said,
“As you can see, Mike has done an
excellent job investing the profits from
the business. We have made more money in
the last two years than I made in the
first twenty. There is a lot of truth to
the statement that the first million is
the hardest.”
“So business has been good?” I asked,
encouraging further disclosure on how
their fortunes had jumped so radically.
“Business is excellent,” said rich dad.
“These new 747s bring so many tourists
from all over the world to Hawaii that
business cannot help but keep growing.
But our real success is from our
investments more than our business. And
Mike is in charge of the investments.”
“Congratulations,” I said to Mike. “Well
done.”
“Thank you,” said Mike. “But I can’t
take all the credit. It’s dad’s
investment formula that is really
working. I’m just doing exactly what he
has been teaching us about business and
investing for all these years.”
“It must be paying off,” I said. “I
can’t believe you live here in the
richest neighborhood in the city. Do you
remember when we were poor kids, running
with our surfboards between houses
trying to get to the beach?”
Mike laughed. “Yes I do. And I remember
being chased by all those mean old rich
guys. Now I’m the mean old rich guy who
is chasing those kids away. Who would
have ever thought that you and I would
be living . . . ?”
Mike suddenly stopped talking once he
realized what he was saying. He realized
that while he was living here, I was
living on the other side of the island
in drab military barracks.
“I’m sorry,” he said. “I . . . didn’t
mean to…”
“No apologies necessary,” I said with a
grin. “I’m happy for you. I’m glad
you’re so wealthy and successful. You
deserve it because you took the time to
learn to run the business. I’ll be out
of the barracks in a couple of years as
soon as my contract with the Marine
Corps is done.”
Rich dad, sensing the tension between
Mike and me, broke in and said, “And
he’s done a better job than I have. I’m
very proud of him. I’m proud of both my
son and his wife. They are a great team
and have earned everything they have.
Now that you’re back from the war, it’s
your turn Robert.”
May I Invest With You?
“I’d love to invest with you,” I eagerly
replied. “I saved nearly $3,000 while I
was in Vietnam and I’d like to invest it
before I spend it. Can I invest with
you?”
“Well, I’ll give you the name of a good
stockbroker,” rich dad said. “I’m sure
he’ll give you some good advice, maybe
even a hot tip or two.”
“No, no, no,” I said. “I want to invest
in what you are investing in. Come on.
You know how long I’ve known you two. I
know you’ve always got something that
you’re working on or investing in. I
don’t want to go to a stockbroker. I
want to be in a deal with you guys.”
The room went silent as I waited for
rich dad or Mike to respond. The silence
grew into tension.
“Did I say something wrong?” I asked
finally.
“No,” said Mike. “Dad and I are
investing in a couple of new projects
that are exciting but I think it is best
you call one of our stockbrokers first
and begin investing with him.”
Again there was silence, punctuated only
by the clinking of the dishes and
glasses as the maid cleared the table.
Mike’s wife Connie excused herself and
took the baby to another room.
“I don’t understand,” I said. Turning to
rich dad more than Mike, I continued,
“All these years I’ve worked right along
side the two of you building your
business. I’ve worked for close to
nothing. I went to college as you
advised and I fought for my country as
you said a young man should. Now that
I’m old enough and I finally have a few
dollars to invest, you seem to hesitate
when I say I want to invest in what you
invest in. I don’t understand. Why the
cold shoulder—are you trying to snub me
or push me away? Don’t you want me to
get rich like you?”
“It’s not a cold shoulder,” Mike
replied. “And we would never snub you or
not wish you to attain great wealth.
It’s that things are different now.”
Rich dad nodded his head in slow and
silent agreement.
“We’d love to have you invest in what we
invest in,” rich dad finally said. “But
it would be against the law.”
“Against the law?” I echoed in loud
disbelief. “Are you two doing something
illegal?”
“No, no,” said rich dad with a chuckle.
“We would never do anything illegal.
It’s too easy to get rich legally to
ever risk going to jail for something
illegal.”
“And it is because we want to always
remain on the right side of the law that
we say it would be illegal for you to
invest with us,” said Mike.
“It’s not illegal for Mike and me to
invest in what we invest in. But it
would be illegal for you,” rich dad
tried to summarize.
“Why?” I asked.
“Because you’re not rich,” said Mike
softly and gently. “What we invest in is
for rich people only.”
Mike’s words went straight through me.
Since he was my best friend, I knew they
were difficult words for him to say to
me. And although he said them as gently
as possible, they still hurt and cut
like a knife through my heart. I was
beginning to sense how wide the
financial gap between us was. While his
dad and my dad both started out with
nothing, he and his dad had achieved
great wealth. My dad and I were still
from the other side of the tracks, as
they say. I could sense that this big
house with the lovely white-sand beach
was still far away for me, and the
distance was measured in more than
miles. Leaning back in my chair and
crossing my arms in introspective
thought, I sat there nodding quietly as
I summarized that moment in our lives.
We were both 25 years old but in many
ways, Mike was 25 years ahead of me
financially. My own dad had just been
more or less fired from his government
job and he was starting over with
nothing at age 52. I had not even begun.
Note: the rest of this chapter
is omitted
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