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Learn how to create asset, and not buying asset with money
- doesn't take money to make money
- be creative and constantly challenge yourself to create asset
- use money from created asset and buy more asset
- know how to differentiate and be both kind of investor
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Average investor buy, hold and pray the price go up, this only works when market go
up. True investor should be able to make money on both market go up and down, go
both long and short
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What is missing from their education is not how to make money, but how to manage
money
The rich focus on their asset columns, while everyone else focuses on their income
statements.
Assest
� Businesses that do not require my presence I own them, but they are managed or
run by other people. If I have to work there, it�s not a business. It becomes my
job.
� Stocks
� Bonds
� Income-generating real estate
� Notes (IOUs)
� Royalties from intellectual property such as music, scripts,
and patents
� Anything else that has value, produces income or appreciates, and has a ready
market
Keep your day job, be a great hardworking employee, but keep building that asset
column.
Financial IQ
- accounting (understand financial statement, see strength and weakness of a
company)
- investing
- understand market (supply and demand)
- law (tax)
The ability to sell and market is the most important specialized skill
So for most people, the reason they don�t win financially is because the pain of
losing money is far greater than the joy of being rich.
There is a big difference between hating losing and being afraid to lose.
Finding a good manager is more important to me than the real estate. A great
property manager often hears of great deals before real estate agents do, which
makes them even more valuable.
Every time I have been arrogant, I have lost money. Because when I�m arrogant, I
truly believe that what I don�t know is not important,�
Steps
1. Have a strong reason to continue
2. Invest in mind and knowledge, keep mind open, dont be arrogant
3. Find friend that you can learn from and alike mind
- brave to separate yourselve from crowd, if everyone know, then sure everyone
rich
4. Focus on management skill more than product, service, etc
- cash flow
- people
- personal time
5. Pay yourselve first, always set aside an amount for invest
- Although I pay my bills last, I set it up to have only small unimportant bills
that are due.
- Don�t get into large debt positions that you have to pay for. Keep your
expenses low.
- don't use saving to pay bill, savings is only to invest, when no money to pay
bill, think how to make more money
6. Getting something for nothing
- invest in something, then get something for free
- invest in real estate, rent it, tenant pay loan, you get properties for free
- a stock speculate to rise, put money in, the stock rise, withdraw the initial
invested money out, then the stock is generating money now, is an asset
- always look for asset we get once we get the money back
7. Luxury
- poor people focus on borrowing money to get the things we want instead of
focusing on creating money.
8. Find a role model and learn/mimick/copy them
- read about them, understand how they think
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Mind
�If you find yourself arguing with a good idea, you may
want to stop arguing.�
Find your "Why" to get rich, if it is strong enough, then eventually you will find
your ways to become rich
Saying something is risky may also be saying, �I�m just too lazy to study the
subject.�
Begin to see yourself in a world or reality where you will never ever need a
paycheck or job again.
Set your priorities correct, you may have to sacrifice a bit of comfort to be rich
1. rich
2. comfort
3. security
Dont worrry too much, instead solve those problems, most of the time things that we
worry might never happen
History does repeat itself. Yet people want to believe that this time, things will
be different.
It is ok to compare a bit, but the real objective of this process is for you to
become a better and more educated investor
Dont afraid of mistake, get through it positively and start again, pick up the
lesson from the mistake
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Plan
Trading != Investing
- Investing is a plan that lay out every procedure and destinations
- Trading is just a technique or a part of the plan(investing)
- trading is like buy and sell stock
Establish a simple plan and strategy that works, and keep doing it
- investing is not full of excitement, it is mechanical and simple plan
�The path to achieving investment success is to study long-term results and find a
strategy or group of strategies that make sense. Then stay on the path.� He also
states, �We must look at how well strategies, not stocks, perform.�
Don't predict/speculate the market, instead prepare for whatever thing that might
happen
Financial plan
- find financial advisor
Realistic goal
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How
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** Cash Flow **
* Leverage *
3 type of income
- ordinary (paycheck, commission, highest taxed)
- portfolio (bond, mutual fond, retirement plan, 2nd highest taxed)
- passive (real estate)
Rich people design their plan to be ready for an opportunity that is not here yet.
That is why it is important to be in the present, in sync with the times, and
gazing into the future.
Must be prepared for the opportunities of the future. If you are not, you will
invest in the investments of the past, and investments of the past often have no
future.
�Your profit is made when you buy, not when you sell.� *****
Every property we bought had to have a positive cash flow on the day we bought it,
and it had to have a
positive cash flow even in a bad economy. (means can rent the house and can cover
the mortage)
We were investors when we were willing to buy and hold the properties for their
cash flow.
We were traders when we knew our entry as well as our exit strategy.
An investor buys to hold. A trader buys to sell.
An investor usually wants cash flow from the asset.
The trader wants to realize a capital gain from buying low and selling high.
- know the difference of both and learn how to be both
Determine money velocity by determine the duration it need to double our investment
- 72 / interest rate per annum = duration it took to double
Ratio of 10 investment
- 2 to be great
- 2 to lost money
- other 6 not going anywhere (can sell it to put money on other deal)
90/10 rules, 10% of people own 90% of stocks worldwide, richest person in the world
- if you want to be in the 10%, do exactly opposite of what most others are doing
Security aim to help to secure your money, and not definitely is an asset
- security can lose money as well, then it will be a liability
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