![]() ![]() If you’re a specialist or focused on a certain aspect of the real estate market, diversifying your portfolio with securities is a great idea.ĭiversification is the number one way to protect yourself against downturn and hedge your investments. I don’t-but that’s because I’m focused on a diversified real estate portfolio. Now, this isn’t to say you shouldn’t invest in stocks. We believe it’s the best possible investment you can make. Real estate is a proven investment that has a natural appreciation and exceptional potential. Just like context was important in my Andex chart example, it’s also important for real estate investors to read this article. Instead, it gives you something so much more valuable: A mindset you can apply to any business situation or investment opportunity you come across in your investing career. We took that book and its philosophy, and we analyzed it up against the Andex chart to get real insights-not just out-of-context numbers.Įverybody should read Rich Dad, Poor Dad if they’re planning on getting involved in real estate investing-or any investing for that matter! It doesn’t teach you special tactics or tricks for investing. Rich Dad, Poor Dad gave us the mindset we need to invest with and be successful. And, if you’re going to read one book, make it Rich Dad, Poor Dad. If you’re going to read one book - Read Rich Dad Poor Dadīased on this example-and dozens more like it I’ve come across during my investment career-we firmly believe real estate is one of the best investments you can make. I can take the number they're showing me on the Andex chart and multiply it for the house purchase price because you invest a lot less money upfront than you would if it were stocks and securities. Using the knowledge I learned from Rich Dad, Poor Dad, I quickly discovered investing in real estate is much better. Rich Dad, Poor Dad teaches you about the mindset for understanding leverage-about having money work for you, instead of working for your money. And, when you borrow it creates leverage. In real estate investing, you borrow most of the money you use to purchase real estate. To understand why you need to look at the way passive money and leverage work. You could have easily only spent $500 on real estate and had it come out to the same value. No, you don't spend $10,000 on real estate in 1950 to have a be worth X today. What I discovered was just the opposite of what I previously thought at first glance. So, I took the knowledge I learned from Rich Dad, Poor Dad and re-analyzed the Andex chart at home. It shows you the best way to create a mindset about investing and dealing with money is having passive money work for you. Rich Dad, Poor Dad teaches you one simple philosophy: Mindset is everything. Mindset is everything when it comes to investing I started to think beyond the numbers and instead, focus on the decision-making behind them. The numbers don’t lie, right?īut then thought about Rich Dad, Poor Dad. So, I walked away thinking it was better to invest in stocks as opposed to real estate, based on what this Andex chart was telling me. Even with the occasional stock market crash or recession, stocks still shot up the chart at a much faster pace than real estate. ![]() The stocks had a much higher value! Looking at the chart, it was a clear no-brainer. Then, he showed me what that same $10,000 investment in stocks from 1950 would be worth today. On the chart, my advisor showed me if I would’ve invested in real estate in 1950 and spent $10,000, what it would be worth today. An Andex chart shows you the cost of things over time and what profits history has given. When I was at their office, they showed me an Andex chart. I recently went to see an advisor about purchasing some stocks and mutual funds. What it teaches, is the mindset you need to succeed in real estate investing. RICH DAD POOR DAD CASHFLOW CHART HOW TOThe book doesn’t give any techniques, tactics or direct advice on how to invest in real estate. ![]() But, in our opinion, none of them helped us as much as reading Rich Dad, Poor Dad. There are a lot of books about investing in real estate.
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