After the success of the book: ‘Rich Dad Poor Dad', the authors felt an urge to present Rich Dad's version of a guide to investing. The book emphasizes items that the rich invest in and the way they do it! The authors are of the opinion that the poor and middle class can learn from this.
The book starts with an account of Robert's attempt to return to business after a stint in the US army. He links up with his longtime friend Mike, with whom he grew up with. Mike is Rich Dad's son. Robert discovers that a lot has changed. Both Mike and Rich Dad had gotten richer than before. Robert is determined to re-launch himself in business with the help of Rich Dad. He begins to seek knowledge on how to invest at the same time look out for investment opportunities.
Some of his investment ventures are cited in the book: ‘Rich Dad Poor Dad'. The authors insist on one investing in real assets such as real estates, stocks, bonds, mutual funds and royalties from intellectual property. Anything that has value, produces income or appreciates and has ready market is a real asset.
Apart from knowing what a real asset is, a successful investor needs to know the basic rules of investing. The authors outline the following rules: 1. know the kind of income you're working for, 2. convert earned income into portfolio income or passive income, 3. keep your earned income secure by purchasing a security you hope converts your earned income into passive or portfolio income, 4. the investor is the asset or liability not the investment or security, 5. a true investor is prepared for whatever happens, 6. if you have the education and experience and you find a good deal, the money will find you or you will find the money, 7. you should be able to evaluate risk and reward.
The authors present a distinction between the following types of investors: accredited, qualified, sophisticated, inside and ultimate. They propose a guide in form of a diagram which is a key to becoming a successful investor. The diagram is referred to as B-I triangle, which gave structure to Rich Dad's ideas. One side of the triangle represents ‘mission', the other: ‘Team' and the third side: ‘Leadership'. You cannot go wrong with a brilliant mission, reliable team and good leadership.
From bottom to top of the B-I triangle, we have: cash flow, communications, systems, legal and product. Having a proper management plan for cash flow, communications, systems and legal with an innovative product goes a long way in ensuring success in business.