Investing

Today, most people spend a lot of time learning how to earn money. They go to school to get a high-paying job, and then they spend years working at that job to earn money. They then do their best to save it. In the new rules, it is more important that you know how to spend your money, not just earn or save it. In other words, people who spend their money wisely will always be more prosperous than those who save their money wisely.

Of course, by spend I mean invest or convert your money into long lasting value. The rich understand that in today's economy you cannot become wealthy by sticking your money under a mattress—or even worse, in a bank. They know that the key to wealth is investing in cash-flowing assets. Today, you need to know how to spend your money on assets that retain their value, provide income, adjust for inflation, and go up in value—not down. This will be covered in more detail throughout this book.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich

There are four basic investment categories. They are:

<ol>
<li>Businesses. The rich often own many businesses providing passive income, while an average person may have many jobs providing earned income.</li>
<li>Income-producing investment real estate. These are properties that provide passive income every month in the form of rent. Your home or your vacation home doesn't count, even if your financial planner tells you they're assets.</li>
<li>Paper assets—stocks, bonds, savings, annuities, insurance, and mutual funds. Most average investors have paper assets because they are easy to buy, require little management, and are liquid—meaning they are easy to get out of.</li>
<li>Commodities—gold, silver, oil, platinum, etc. Most average investors do not know how or where to buy commodities. In many cases, they don't even know how or where to buy physical gold or silver.</li>
</ol>

A sophisticated investor invests all four categories. That is true diversification. The average investor believes they are diversified, but most are only in category three, paper assets. That is not diversification.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich

Rather than send a part of our income to Wall Street every month, Kim and I invest our own money, and that money puts more money in our pockets. Why rick investing for the long term in the stock market and lose control of your investment when you can invest with less risk and receive more income every month, as well as pay less in taxes, use debt to become richer, and have inflation increase your cash flow?

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich

Technical investing is measuring the emotions or moods of the markets by using technical indicators. Technical investors may not care about the fundamentals of a business.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich

Since most investors have little financial education, most people invest in paper assets.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich

Once you decide which asset class is best for you, and which asset class you are most interested in, then I suggest studying that asset class and investing your time before investing your money. The reason I say this is because it is not the asset itself that makes you rich. You can lose money in any of the asset classes. Rather, it is your knowledge of each asset class that makes you rich. Never forget that your greatest asset is your mind.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich