FINDING YOUR MAGIC INVESTING FORMULA by Robert Kiyosaki
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FINDING YOUR MAGIC INVESTING FORMULA
by Robert Kiyosaki
People often ask me, “How do you find great investments?” My standard reply is, “You have to train your brain to see them. Great investments are
all around you.”
I know that’s not a very satisfying answer. Most people want something more specific and concrete. But my reply is as accurate as possible. If we
could’ve seen all the great investments just in the past decade, we’d all be multibillionaires.
Missing Out on Millions
There have never been more opportunities to become rich than in the last 10 years. And there’ll be even more opportunities in the next 10. Let me
explain. Like many investors, I didn’t see the power of eBay almost a decade ago. If I had, I’d be a billionaire today. Nor did I see the power of
YouTube, or Google, or MySpace. Being an old guy, my brain isn’t trained to see investing opportunities in cyberspace. So I missed them.
Thirty years ago, when my business career was just starting at Xerox, I was introduced to a new type of computer. I wasn’t tuned into computers at
the time, so little did I know that I was looking at the early version of what was to become the Macintosh. So I also missed that billion-dollar
opportunity, too. How many billion-dollar opportunities have I missed? Maybe millions. If I’ve missed so many million- and billion-dollar
opportunities, why am I writing for Yahoo! Finance? That’s a valid question, and the answer has to do with helping you find great investments.
Perseverance Pays Off
I took my first real estate investment course in 1974 in Honolulu. The cost was $385, and I believe it was two or three days long. Toward the end of
the class, the instructor said something I’ve never forgotten: “Now you know the difference between good real estate investments and bad real
estate investments. Now you all know what to look for.”
He paused and then added, “The problem is, most people will tell you such investments don’t exist. Your friends will tell you so, and so will real
estate agents.” Truer words were never spoken. For the next few months, I went from real estate office to real estate office, looking for
investments. As promised, the real estate agents told me what I was looking for didn’t exist. My friends and co-workers at Xerox told me the same
thing, and said I was either dreaming or smoking funny cigarettes.
Finally, in a small, obscure real estate office in downtown Waikiki, I met a scruffy little broker who said, “I have what you want.” The next
weekend I was on a plane to Maui, where he’d found an entire condominium development that was in foreclosure.
I purchased my first piece of investment real estate for $18,000, putting the $2,000 down payment on my credit card. The one-bedroom/one-bath condo
paid me a positive cash flow, even after all the expenses and mortgage payments. My investment career had begun. More important, I was training my
brain to see what most people don’t see. That $385 real estate course has made me millions of dollars over the years.
Keep an Open Mind
Last year, around tax time, I wrote a Yahoo! Finance column called “Think Rich to Lower Your Taxes.” It was about an investment strategy known as
the “velocity of money,” and how I use it to invest, make a lot of money, and then legally use the tax laws to minimize my own taxes. I suspected
the column would spark some controversy, and it did. For a couple of weeks, I kept track of the reader responses to it. Some of the less-complimentary
comments reminded me of what those real estate agents and my friends at Xerox said to me back in 1974.
You see, our brains are either our greatest assets or our greatest liabilities. As I said, when it comes to investment opportunities in technology, my
brain is a liability; I just don’t get it. When it comes to investment opportunities in real estate, gold, oil and silver I’m above average, but
not great. And that’s because I’ve trained my brain to see opportunities in those areas.
So, instead of criticizing the readers who were close-minded (or even mean-spirited) about my advice, I encourage them to keep an open mind and find
their own way of seeing investments most people miss. That’s how you get rich. People who refuse to open their minds to new strategies seldom become
rich, which I guess is why there are more critics in the world than rich people.
Finding Your Magic Formula
One of the most important things my rich dad taught me was to never say, “I can’t do it” or “I can’t afford it.” Those thoughts are
self-limiting, and it’s hard to find great investments when you’re basing your behavior on limitations. In today’s world, there are more
investing opportunities than ever. Why would anyone want limited financial results in an unlimited world?
One of the reasons I write and speak is so I can put forth ideas that challenge the way people think about investing. If you want the same old
financial-planning dogma of “work hard, save money, live below your means, get out of debt, and invest in a well-diversified portfolio of mutual
funds,” then my column is obviously not for you.
My job is to stimulate your thinking, inform you about why rich people get richer, and encourage you to find the magic financial formula that works
for you. I found mine, and I want you to find yours.
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