Robert Kiyosaki
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8 Key Factors to be a Great Investor

By Robert Kiyosaki from Daily Reckoning  | 22 December 2018

Rich dad used to say, “When it comes to money, many people are financial hypochondriacs.”

Their thinking comes from the lower mind which blurs their vision of the future. These are the people who often drive their car by looking into the rearview mirror. Their fear of losing causes them to not take action when once-in-a-lifetime opportunities are placed right in front of their eyes.

Later as they drive down the highway of life, you hear them saying, “I would have, I should have, I could have.” As many wise people have said, “Hindsight is 20/20.” Rich dad said, “If you want to be rich, it is best to be farsighted.” And if you’re thinking it’s too late for you, there’s good news: I can show you how to get new streams of passive income every single week.

When I caution people about the coming stock-market crash, I am not pessimistic about the future. I am very optimistic about the future. Warning people about the coming stock-market crash is the same as warning a friend about a road up ahead that is washed out. If the person will take another route, they can still get to their destination safe, sound, and on time.

As captain of your own ark, one essential skill is to develop your vision. Rich dad’s definition of vision is “seeing with your mind rather than with your eyes.” In order to develop this vision, it is important to first train your middle mind and then go out in the real world and allow your higher mind to develop its natural wisdom, often called intuition or instinct.

Things are changing far too quickly to attempt to see the future through your rearview mirror. Regardless of how old you are, stop for a moment and think of all the changes that have happened in the last few years.

Thinking back upon my own life, I remember when a golf club called a wood really was made out of wood. Today, the new woods are made out of new composite materials I have never heard of. In other words, the game remains the same, but the tools used to play the game have changed dramatically. That is true in many areas of life. Today when someone says, “Let’s stay in touch,” it could be via foot, car, bus, plane, telephone, fax, regular mail, or email.

If you go further back in time, you will see that just a hundred years ago, not even kings, queens, or the richest people in the world were flying on planes because there weren’t any. Almost anyone can afford to fly today.

A hundred years ago, only the rich had cars. Today, cars are everywhere. A hundred years ago, you needed to know Morse code to communicate over the telegraph.

Today, people all over the world carry cell phones. I do not know too many people today who know Morse code. In 1990, the world did not know what the World Wide Web was. Today, the Internet is changing the future of the world faster than any other invention in history.

How to Improve Your Vision to See the Future

One way for you to see the future is by watching things getting too big. Then watch for something small or invisible to replace it.

For example, soon after the attack on the World Trade Center, Chevron and Texaco, two giant companies, announced that they were merging to become a giant of an oil company. On the same page of the business section, a smaller company announced a breakthrough in fuel-cell technology, a new technology that has the potential of taking a lot of business away from big oil companies.

Bill Gates and Steve Jobs became very rich young men by seeing what big companies could not see. Bill Gates got the software contract for IBM’s PCs because IBM did not see the spread of powerful and smaller computers. Steve Jobs became a rich man by using a technology that Xerox did not know how to market, a technology that helped create the Macintosh computer.

The Invisible Economy Is Strong and Growing

Dr. Fuller predicted that we would soon witness the death of the Industrial Age. He also predicted that it might be difficult for people to see the dawn of the Information Age simply because the changes would be invisible. Dr. Fuller died in 1983 and did not live to see many of his predictions come true, but they did.

Just look at the Internet and you will see that the world of the invisible is here. This invisible economy presents a growing problem for governments because governments are by-products of the Industrial Age. The government is trying to collect taxes and define borders

for the invisible economy of the Information Age. This problem for governments will grow if the invisible economy becomes too big, and government cannot collect taxes or define borders. If this happens, the currency of the country will eventually weaken, simply because the power of a country’s currency is linked to its ability to collect taxes.

So have governments gotten too big too? Will there still be government, as we know it, in the Information Age? Can government become invisible?

Dr. Fuller believed governments were obsolete. He believed that humanity was about to evolve or disappear because of government’s diminishing powers. Fuller believed that humans had to choose between the two Utopian worlds of greater personal integrity or bigger government. Otherwise, humanity, as we know it, would disappear. In other words, we as individual human beings need to solve more problems rather than turn those problems over to the government.

For centuries, captains of ships have always posted a lookout on the bow of the ship as well as in the crow’s nest. As captain of your own ark, you too will need to post lookouts on your bow and in the crow’s nest. Metaphorically that means you will need to do the following:

1. Keep Your Word

Dr. Fuller said that we were entering the age of integrity. Integrity simply means “whole or complete.” That means that your thoughts, your words, and your actions need to be the same. If you will do that, the future is yours.

2. Keep an Open Mind and Your Ears Tuned for Change

Since changes are now invisible, you will have to see more with your mind than with your eyes.

3. Learn to Read Financial Statements

Regardless if you invest in companies, stocks, real estate, government securities, or yourself, a financial statement allows the mind to see the true financial condition of the investment, government, or person in question.

Always remember that a banker wants to see neat and complete financial statements. Many times a banker decides to lend or to not lend you money in the first three minutes.

If you do not have neat and complete financial statements and are not articulate in explaining your financial position, then chances are that the only kind of debt you will be granted is poor debt at high interest rates.

4. Use Technology

Computer programs now allow the individual to see what before only the rich or powerful could see. I have friends who trade stocks or options. They now have charts and software that give them the same power to search for investments that giant investment firms have.

The individual investors have the same power as the big firms because of these new tools of the trade. Similar advances in technology are available for businesses and real estate. As stated earlier, the game of golf remains the same, but the tools have changed.

5. Watch for Bigness

There is a saying in the investment world that when someone becomes famous enough for the front cover of national magazines, their career is over. Not long ago, in the Industrial Age, a blue-chip company may have been a leading company for 60 years or more.

Today, with advances in technology, the life expectancy of a company is much shorter. In other words, the moment something or someone becomes too big, they are about to decline and be replaced by something or someone new.

That same observation tends to be true for mutual fund companies, real estate, and careers. There is always something or someone new coming along to take the place of the leader. Your job is to be aware of people or things becoming too big and then watch for the replacement.

6. Watch for Changes in the Laws

Rich dad was forever watching for changes in the laws and the effect the laws had upon our future. ERISA and its subsequent amendments are an example.

The law that created Social Security has created a problem that will have to be solved one way or the other. I suggest you watch how government ultimately decides to handle this massive mess. As rich dad said, “Changes in the law change our future.”

7. Watch Out for Inflation

Just as markets go up and down, so does inflation. Right after September 11, 2001, the Federal Reserve Bank flooded the world with U.S. dollars to provide economic stability and liquidity.

The long- term effect of all this printed money may lead to inflation, which means the U.S. dollar will go down in value. If inflation sets in, anything of questionable value will lose value, while things of value—assets such as real estate, gold, silver, and utility stocks—may greatly increase in value.

8. Pay Close Attention to Government’s Handling of Its Social Programs

It is not news that Social Security, Medicare, Medicaid, and other government programs are in trouble and the problem is getting worse. As stated earlier, government is not solving these problems. It is just pushing these problems forward onto future generations.

Sometime around 2016, all this pushing the string forward is about to come to a head. Pay close attention to how the growing problem is handled. If governments begin raising taxes excessively, be prepared for anything, and be prepared to act quickly.

Today, money can literally move at the speed of light. The problem is becoming more and more serious. Medicaid is the leading reason for overspending.

The problem is only going to get worse as more and more people grow old and require medical care they cannot afford. We all need to watch how the handling of this growing problem unfolds.

The future will be different. It is more important than ever to see what others cannot or do not want to see.

Regards,

Robert Kiyosaki

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

This article by Robert Kiyosaki was originally published at Daily Reckoning.

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