Here am I again full of urge and overwhelmed by a lot of lessons learned from the latest chapter of the book with the title “Basic Rules of Investing”. Looks like the author now feels that I have grasped the mindset he wanted to instill on every person. That after telling how he acquired the investing knowledge from rich dad, he is now giving the basic rules in investing.
There are seven steps given on the chapter but I did not realize that it was a long chapter after all. The rules given out by rich dad was really a good read even though I had a few ideas on some of the rules. As much as I want to share word for word the basics of investing as stated on the book, it is against the law. What I think I could give is the important elements of investing based on the seven basic rules. They are as follows:
- The kind of income you earn – there are three classifications of income according to the author. The kind of income you earn and the kind of income you wanted to earn through investing. It is an important element that if you cannot distinguish one from the others, you might set the wrong financial plan and result to financial losses.
- The investor – as the one steering the ship, having the resources, expertise and experience, it is the investor who would devise the plans and strategies to take in order to achieve the desired goals. The investor’s mindset would determine the outcome of his or her decisions which makes it a vital element of investing.
- The changes that might occur – lastly, the thing that makes investing risky are the changes. It might be a change in market situation, a change of intent or a change of plans by the investor. From the famous quote of Heraclitus stating “There is nothing permanent except change.”, investing is also not excused from various changes that might occur.
From those three elements in the basic rules of investing, it revolves now on how investor will use his excess cash, experience and education to attain his goals. There was also a question by the author to rich dad on how he was able to do the things that he were able to do, what are his options and more. Questions that rich dad will unfold on the succeeding chapters.
NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:
- Chapter 1
- Chapter 2
- Chapter 3
- Chapter 4
- Chapter 5
- Chapter 6
- Chapter 7
- Chapter 8
- Chapter 9
- Chapter 10
- Chapter 11
- Chapter 12
- Chapter 13