Blog | Personal Finance

Finding Your Magic Investing Formula

Becoming a successful investor requires an open mind, and a clear vision

meet your own rich dad - start your quiz now

If you’re becoming more and more interested in being an investor, you may ask yourself "How do you find great investments?" Well, the truth is, you have to train your brain to see them. Great investments are all around you.

Now, that may not be a very satisfying answer. Most people want something more specific and concrete. But this is the truest, and most accurate response to that question. 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 twenty years. And there will be even more opportunities in the next twenty.

For example; like many investors, Robert Kiyosaki didn't see the power of eBay almost thirty years ago. If he had, he'd be a billionaire today. Nor did he see the power of YouTube, or Google, or MySpace (or any social media, in fact). Being of another generation, his brain just wasn’t trained to see investing opportunities in cyberspace. So he missed them.

Nearly fifty ago, when Robert’s business career was just starting at Xerox, he was introduced to a new type of computer. He wasn't tuned into computers at the time, so he had no idea that he was looking at the early version of what was to become Macintosh. So he also missed that billion-dollar opportunity, too. How many billion-dollar opportunities have you missed? Maybe hundreds; isn’t that just painful to think about?

But despite missing countless opportunities, how did Robert end up building an unimaginable career centered around helping others build their wealth? That's a valid question, and the answer has to do with helping you find great investments.

Perseverance pays off

Robert took his first real estate investment course in 1974 in Honolulu. The cost was $385, and it lasted only a few days. Toward the end of the class, the instructor said something he’s 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 have yet to be spoken. For the next few months, he went from real estate office to real estate office, looking for investments. As promised, the real estate agents told him that what he was looking for didn't exist. His friends and co-workers at Xerox told him the same thing, and said he was either dreaming or smoking funny cigarettes.

Finally, in a small, obscure real estate office in downtown Waikiki, he met a scruffy little broker who said, "I have what you want." The next weekend, Robert was on a plane to Maui, where he'd found an entire condominium development that was in foreclosure.

He purchased his first piece of investment real estate for $18,000, putting the $2,000 down payment on his credit card. The one-bedroom/one-bath condo paid a positive cash flow, even after all the expenses and mortgage payments. This was the beginning of his investment career. More importantly, he was training his brain to see what most people don't see. That $385 real estate course has made him millions of dollars over the years.

Keep an open mind

You see, our brains are either our greatest assets or our greatest liabilities. As mentioned above, when it comes to investment opportunities in technology, Robert would call his brain a liability. But when it comes to investment opportunities in real estate, gold, oil, and silver, he’s above average. And that's because he’s trained his brain to see opportunities in those areas.

So, instead of criticizing people who are close-minded (or even mean-spirited) about Robert’s advice, he encourages 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 is probably why there are more critics in the world than rich people.

Finding your magic formula

One of the most important things rich dad taught Robert 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 before. Why would anyone want limited financial results in an unlimited world?

One of the reasons Robert began this company, Rich Dad Poor Dad, is so that he can — with great reach — 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 this column is obviously not for you.

Instead, it’s time to stimulate your thinking, become informed about why rich people get richer, and find the magic financial formula that works for you. Robert found his, and you can find yours.

So, what are you waiting for?

Original publish date: February 09, 2023

Recent Posts

Three Investment Values
Personal Finance

The Rich Dad Guide to Investing Values: Defining Your Path to Financial Success

It’s important to know which core values are most important to you, especially when it comes to the subject of money and financial planning.

Read the full post
Risky vs. Safe Investments
Paper Assets

Smart Investing: Understanding the Difference Between Risky and Safe Options

What you may think is a “safe” investment, I may see as risky. For example, many financial planners advise their clients to get into so-called “safe” investments — such as savings plans, mutual funds and 401(k)s.

Read the full post
Mastering Money
Paper Assets, Personal Finance

Mastering Money: The Key to Achieving Financial Freedom

Begin the path to making money work for you today, not the other way around.

Read the full post