Rich Dad’s Sign of a True Investor
Andy Tanner, one of Robert Kiyosaki’s “Rich Dad” disciples, wrote an excellent book entitled Stock Market Cash Flow. He waits until nearly the end of the book before he reveals the secret to cash flowing, which is, of course, selling options. Tanner’s book is a straightforward, easy to understand method of withdrawing money from the markets without ever having to pick a direction.
“One sign of a true investor is having the ability to maintain or even increase cash flow even when the markets or the economy are falling.”
~ From Stock Market Cash Flow (Rich Dad/Poor Dad Advisor Series)
Yet, for every copy of this book sold, I’ll wager thousands of books will sell telling investors how to find the next Apple, how to “get rich” on shares ready to “explode,” or how to simply pick winning stocks. This even though the statistical odds of professional stock pickers outperforming the general market are staggeringly low over the long term. For retail investors, the stats get even grimmer. But this doesn’t stop the enormous flow of books, courses and magazines telling us all how to pick stocks.
Why this shunning of straightforward instructions for cashflow in favor or chasing Amazon or Facebook to every dizzying heights?
And the riskiest comfort zone of them all? In my opinion, it is this: “A. Buy stock B. Hope stock goes up C. If stock doesn’t go up, lose money.”
Right now, everyone from Carl Ichan to Homer Simpson is happy about the stock market. Buying more Amazon may very well prove fruitful, but for how long? The more important question is, where will you be when the tide goes back out?
As Tanner so simply yet brilliantly states in his book, “One sign of a true investor is having the ability to maintain or even increase cash flow even when the markets or the economy are falling.”
I couldn’t have said it better myself.