Finding Money Where Others Don’t
In every business and every industry, some people just seem to drip with success.
They seem to know all the right people, make all the right decisions, be in all the right places at exactly the right time. They seem destined for success whether they even try or not.
Real estate investing is no different. In every city or town, there seem to be real estate tycoons that struck it rich through real estate.
These are the people who just make success look easy. They appear confident, knowledgeable, savvy, and seem to see opportunities where others don’t. It’s easy for onlookers to think the achievements of these golden few are the result of luck or some sort of magic. But magic and luck have absolutely nothing to do with it.
My rich dad said, “The average person is 95 percent eyes and only five percent mind when they invest. If you want to become a professional on the right side of the CASHFLOW quadrant, you need to train your eyes to be only five percent and train your mind to be the other 95 percent.”
Rich dad went on to explain that people who train their minds to see money have tremendous power over people who don’t.
Train Your Brain to See Money
So what is the first step in training your brain to see money?
The answer is easy. It’s financial literacy. It begins with the ability to understand the words and the number systems of capitalism.
If you don’t understand the words or the numbers, you might as well be speaking a foreign language. And, in many cases, each quadrant represents a foreign language.
If you look at the CASHFLOW Quadrant, each quadrant is like a different country. They don’t all use the same words, and if you don’t understand the words, you won’t understand the numbers.
For example, if a medical doctor says, “Your systolic is 120 and your diastolic is 80,” you might wonder, is that good or bad? Is that all you need to know about your health? The answer is obviously no, but it’s a start.
It’s like asking, “My stock’s P/E is 12, and my apartment’s cap rate is 12. Is this all I need to know for my wealth?” Again, the answer is no, but it’s a start. At least we’re beginning to speak the same words and use the same numbers. And that is the beginning of financial literacy, which is the basis of financial intelligence. It starts with knowing the words and numbers.
The doctor is speaking from the S quadrant, and the investor is speaking with the words and numbers of the I quadrant. They might as well be speaking different languages.
In my opinion, the ability to make money begins with understanding the words and the numbers. As my rich dad always said, “If money is not first in your head, it won’t stick to your hands.”
Financial Intelligence Leads to Seeing Opportunity Where Others Don’t
In the last crisis the world faced, the 2008 Great Recession, many people lost their fortunes. In this crisis, the same thing is happening. This is not a surprise. In 2008, I asked myself, “Where is the money flowing and how can I get there first?”
This led Ken McElroy, my Rich Dad Real Estate Advisor, and me to take advantage of some of the only liquidity left in the market, Fanny and Freddie loans, to secure apartment communities at rock bottom prices. These deals already gave us cash flow from day one, and a few years after the crisis, we sold those properties and made a lot of money.
At the time, a lot of investors told us no when we offered the opportunity to invest their equity in these deals. They were scared and didn’t want to let go of their money. Today, they regret those decisions.
The same thing happened with many entrepreneurs during the early days of COVID. While some people hunkered down in fear and didn’t take risks, others were finding ways to innovate and make money. For instance, in the first couple of months of the pandemic, independent sellers on Etsy sold $133 million in face masks. Money out of thin air by quickly providing a product everyone needed. That doesn’t happen by accident. People were ready and saw opportunities others didn’t.
In short, those who are successful in hard times see money when others don’t. This comes down to one big difference: higher financial intelligence.
If you have high financial intelligence, you can see where money is flowing, be there before others are, reap the benefits of that money by acquiring assets that grow in value and provide cash flow, and then use that money to then go acquire more assets where more money is flowing. The work is in seeing, then money works for you. It isn’t a magic trick, but you have to study like a magician to be good. It takes dedication for years but it’s the best thing you could spend your time getting good at.
For rich dad, financial intelligence started with simple financial education and grew from there. He felt that education was important because you needed to train your brain to see money; it doesn’t come naturally.
Know What Real Risk Is
The second step in training your brain to see money is to learn to recognize what real risk is. When people say to me that investing is risky, I simply say, “Investing is not risky. Being uneducated is risky.”
Investing is much like flying. If you’ve been to flight school and spent several years gaining experience, then flying is fun and exciting. But if you’ve never been to flight school, I’d leave the flying to someone else.
Rich dad firmly believed that any financial advice was better than no financial advice. He was a man with an open mind. He was courteous and listened to many people, but he relied ultimately on his financial intelligence to make his decisions. “If you don’t know anything, then any advice is better than no advice. But if you can’t tell the difference between bad advice and good advice, then that is risky.”
He also firmly believed that most people struggle financially because they operate on financial information handed down from parent to child, and most people don’t come from financially sound families. He often said, “Bad financial advice is risky, and most of the bad advice is handed out at home—not from what is said, but from what is done. Children learn by example more than words.”
How Do You Get Started?
People often ask me how to get started thinking like a rich person.
I always recommend starting small and seeking education, rather than running out and jumping into investing.
The first question you should ask yourself today is, what are you trying to accomplish?
Regardless of your answer…I have one suggestion.
One of the fastest ways to learn new things and change your results is to make sure of one thing: You can’t be the smartest person in the room.
If your ego or fear or insecurities require you to feel smarter than others all the time, your journey to wealth is going to be a slow one.
Instead, make the mind shift to seek out people who are smarter than you – especially in the areas that you are trying to improve.
This simple strategy has worked for me for years.
This week, through my outside business Rich Dad World, I have an opportunity for you to experience this. In fact, I’ll be in the same boat as you.
Join me for the global release of my new livestream event, The Future of Wealth Building is Here.
Kim and I will be joined by two of the smartest people I know, Jim Rickards and Nomi Prins. These two are very experienced financial experts with an amazing ability to look into the future and share incredible insight for investors of all experience levels.
This entire online event is free for you – and we’ll discuss strategies for the most popular forms of investing, including real estate, stock, crypto, precious metals and more.
As an added bonus for you, after you register for free, my team will email you our new Rich Dad Special Report: What You Need to Know About Cryptocurrency. Thisspecial report features information that Rich Dad Crypto Expert, Jeff Wang and I have prepared on this hot topic.
I’m excited to share this new event with you. I expect it will be worth your while and a great opportunity to learn from our special guests.
Editor, Rich Dad Poor Dad Daily