I’m re-reading Robert Kiyosaki’s, Conspiracy of the Rich
This is no trivial concept. And, I’m glad he keeps writing about it. I need to be reminded again and again. I need to have this concept reinforced and inculcated into my brain.
You see, sometimes I forget. And, that can lead to financial pain.
How come I forget?
Because I come across – and consequently read – a lot of mainstream financial advice. And, if you’re not careful, some of this advice can creep into your thinking. Like it has mine. Let me give you an example.
Every now and then I think about capital gains. “Wouldn’t it be great to sell that property and make a handy profit?” I say to myself. Or, I read an article from the latest issue of the trendy property investing magazine talking about buying a house or unit in an up and coming growth area.
The focus is on capital gains. And Robert reminded me this morning how investing for captial gains is playing right into the hands of the super rich. You see, the super rich don’t invest for capital gains; they invest for cash flow. And, Robert is saying instead of complaining about the super rich, instead of trying to change the rules, why not learn the rules and do what they do – invest for cash flow?
Why do people invest for capital gains instead of cash flow?
Robert answers this question. The reason? It’s easier! That’s right, it’s much easier to invest for captial gains than it is for cash flow.
Why?
Because anyone can buy an asset and hope it rises in value. People do it all the time. They do it with real estate, stocks, super funds, businesses, mutual funds etc. But, let’s face it, this is punting. Look what happened in the US. What happened to all those people who bought real estate during the boom hoping for the prices to go even higher? In case you’ve been in the peace corps or hibernating for the last 5 years … here’s what happened – THEY GOT SLAUGHTERED!
Investing for positive cash flow is a lot more difficult. You’ve got to hunt. You’ve got to be more financially literate. You’ve got to know what you’re doing.
I’m still working on becoming a good positive cash flow investor. I’m still learning. That’s why it was good for me this morning to re-read Robert’s amazing and hard hitting advice.
Get off the captial gain quick fix and get more positive cash flow happening!
Ok, Robert, I’m getting on to it straight away!