Investor Vs Trader

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The investment had to make sense today, not tomorrow. I say this because too many people have the buy, hold, and pray strategy. Rich dad always said, “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. 

Know the difference between being an investor and a trader. 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 week as our exit strategy. In other words, an investor buy to hold. A trader buy to sell. It you want to retire rich, you need to know how they are different and how to be both.

If you can understand this principle of investing, you will understand what the velocity of money means. It means you want your money back as quickly as possible so it can be reinvested to acquire other assets.

Robert T. Kiyosaki

Asset and Liability

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The most important rule is to know the difference between an asset and a liability. Once you understand the difference, concentrate your efforts on buying income-generating assets. That’s the best way to get started on a path to becoming rich. keep doing that, and your asset column will grow. Keep liabilities and expenses down so more money is available to continue pouring into the assets column.

My next goal would be to have excess cash flow from my assets reinvested into the asset column. The more money that goes into my asset column, the more my asset column grows. The more my assets grow, the more my cash flow grows. And as long as I keep my expenses less that the cash flow from these assets, I grow richer with more and more income from sources other than my physical labor.

Robert T. Kiyosaki