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How to be a Rich Investor

The three essential skills you need to know to get rich as an investor

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Summary

  • There are two different types of investors - but one will make you rich

  • Increase your financial education to learn how to invest like the rich

  • To be a rich investor, you need to have a rich investor


There are two types of investors.

  1. Packaged investor:

    The most common investor buys packaged investments. He calls a retail outlet, such as a real-estate company, a stockbroker or a financial planner, and buys something. It could be a mutual fund, a REIT, a stock, or a bond. Packaged investing is a clean and simple way of investing; like a shopper who goes to a computer store and buys a computer right off the shelf.

  2. Creative investor:

    This investor-type creates investments. They usually assemble a deal in the same way a person who buys components builds a computer. Like building a computer from scratch, this type of investing takes time, talent, patience, and knowledge.

If you want to invest like the rich, be a creative investor

The creative investor is a professional investor. Sometimes it may take years for all the pieces of a deal to come together. And sometimes they never do. It's important to learn how to put the pieces of a creative investment together. Sometimes, the tide goes against you and you see huge losses. But when the pieces come together, it's a huge payoff.

Robert Kiyosaki’s rich dad, his best friend’s father, encouraged him to be a creative investor; as such, Robert has spent his entire life applying these lessons on money as a creative investor. It paid off well.

Three skills of creative investors

If you want to be a creative investor, you need to work hard on building your financial intelligence through financial education. Out of your financial education, you will then need to develop three main skills.

If you want to be a creative investor, you have to learn to do that which stops most people—raise capital. The creative investor needs to know how to raise capital, even when the bank won't give her money. The good news is there are plenty of ways to get money that don't require a bank.

  1. Find an opportunity that everyone else missed.

    See with your mind what others miss with their eyes. Use the example of a man who bought a rundown old house that was spooky to look at. Everyone around him would wonder why he bought it; but he had seen what others hadn’t. After going to the title company, he discovered that the house came with four extra lots. After buying the house, he simply tore it down and sold the five lots to a builder for three times what he paid for the entire package. He made $75,000 for two months of work. It's not a lot of money, but it sure beats minimum wage. And it's not technically difficult. It just took a different mindset.

  2. Raise money.

    he average person only goes to the bank to get money. When a good opportunity comes around, they say, "The bank won't lend me money," or "I don't have the money to buy it." The average investor's mindset about money and investing holds him back.

  3. Organize smart people.

    Intelligent people work with or hire people who are more intelligent than they are. When you need advice, make sure you choose your advisors wisely.

    When it comes to being a rich investor, there are a lot of skills to learn and practice. But the rewards are astronomical. If you don't want to learn those skills, then being a package investor is highly recommended.

    At the end of the day, what you know is your greatest wealth. And what you don't know is your greatest risk. But there is always risk, so learn to manage it instead of avoid it. Invest in your financial education so that you can then grow to be a rich investor through creative investing.

This post was adapted from Rich Dad Poor Dad, the #1 selling personal finance book of all time.
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Original publish date: November 13, 2012

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