Introduction
— How you invest is up to you. What I
would do is ofter different from what you
should do.
— It is slow, risky, inefficient, highly taxed way to invest.
— The S&P 500 is an international market, while real estate is a local market. — Success in real estate depends upon you as the investor. Success in the S&P depends on the S&P 500 companies.
— One of the best-kept secrets of successful investors is not diversifying (within just one asset) but integrating. Rather than just investing in one asset, successful investors integrate two or three of the asset classes, and then
accelerate,
leverage, and
protect the cash flowing through the assets.
Investing in real estate is much more capital-intensice and management-intensive.
— Have strong advisors, and then to integrate and accelerate the power of financial forces:
1. Business
2. Real Estate
3. Paper Assets
4. Your Banker's money
5. Tax Laws
6. Corporate laws
— Interate means to combine and operate together. Diversify means to separate and operate apart.
— "Synergy" is ofter defined as "the whole is greater than the sum of the parts." "If you take control of your money, you take control of your life."
"Give your money to strangers and your money will work for the strangers— before your money works for you."
| Age | Game Period |
| 25 - 35 | 1st Quarter |
| 35 - 45 | 2nd Quarter |
| Half time |
| 45 - 55 | 3rd Quarter |
| 55 - 65 | 4th Quarter |
| Overtime |
| Out-of-Time |
Part I The synergy of advisors and different points of view / What Should I Invest In?
Chapter 1. Ask a Salesperson
"One of the first things you need to learn if you want to be a better investor is the difference between a sales pitch and sound investment advice."
"Invest for the long term, buy, hold, and diversify."—
It is a sales pitch.
"Stock market losses are not losses to society. They are transfers from one person to another."—Michael Lewis, auther of
Liar's Poker,
The New New Thing, and
Money ball.
"You need to learn patience if you want to be an investor."
"Impatient investors often invest hastily—hence their impatience causes them to invest in under-performing investments."
"You got what you paid for."
"The worst investments go to impatient investors."
"Most investors blame the investment rather than themselves. In reality, the real problem is the
investor not the
investment."
"If you do not make the time to learn to be a better investor now, you will be saying the same things tomorrow as you are today. You'll still be saying 'I didn't have time to learn more and do more research.' Because of your impatience, your laziiness, and you lame excuses about not having enough time, you will do the same thing you just did. which is to hand your money over to total strangers and have no idea what they are doing with your money."
"Be willing to invest the time to look for a great investment."
"The worst thing about not learnig to be an investor is that you never see great investments. If you never invest the time to learn to be an investor you will live in fear of investing, constantly saying 'investing is risky.' By believing that investing is risky, you avoid investing, or you turn your money over to people you hope are investing wisely. But the worst thing is that when you avoid investing, you miss out on the hottest deals in the world. You live in fear rather than live with the excitement of searching for and finding great deals. When you play it safe, living in fear of
losing, you miss out on the excitement of
winning. You miss out on the excitement of getting richer. That's the worst thing about being impatient and not investing the time to become a real investor."
"If the investor is undducated, anything he or she invests in will be risky."
"So it's
not the investment that is risky . . . it's the investor."
"A smart investor focuses on becoming a smarter investor. The average investor focuses only on making money."
"Don't focus on the money. Focus on learning to be a better investor."
"If you do not know what to do with your money, put it in a bank, and do not tell anyone that you have mney to invest."
"Invest
time before invest
money."
Chapter 2. Ask a Cattle Rancher and Then Ask a Dairy Farmer"My favorite time frame for holding a stock is forever." —Warren Buffett
"The propensity to gamble is always increased by a large prize versus a small entry fee, no matter how poor the true odds may be." —Warren Buffett
— Investing for
Cash Flow versus
Capital Gains.
— Investors investing for captial gains are investing in the
greater fool method of investing, which means they are hoping for a fool greater than they.
— Investing for capital gains is gambling.
Priority of investment goals:
1. Cash flow
2. Leverage
3. Tax advantages
4. Capital gains
"The slow investor lost and the fast money get out."
— Build pipelines so the cash can flow then expand the diameter of your pipe.
—
Focus on the speed of cash flowing.— If it does not move quickly, it is often attacked by predatory taxes, has less chance of being leveraged with OPM, and becomes a target for thieves.
— The job of my money is to work hard for me, acquiring more assets.
— To be a person who invests for cash flow require tremendous skill and knowledge.
— Most investments do not cash-flow—at least for the right price.
— The real skill of real investors is to acquire assets that cash-flow—putting money into their pockets rather than taking money out.
Chapter 3. Ask Your Banker5. Exit
4. Protect
3. Leverage
2. Manage — Financial education
1. Earn/Create — Professional / Academic education
Chapter 4. Ask Your Insurance AgentChapter 5. Ask the Tax ManChapter 6. Ask a Journalistblah, blah, blah
Chapter 7. Ask a Gambler"Don't count your money while you're sitting at the table."—A PROFESSIONAL GAMBLER
"A professional investor needs to know three things.1. when to enter a market2. when to exit the market, and3. how to get their money off the table.""An amateur investor leaves their money sitting on the table and eventually loses it all. Because eventually the market wins. The market gives and the market takes it all back if you just leave your money sitting there."
Chapter 8. Ask NewtonChapter 9. Ask Father Time
Part II The synergy of different assets and other financial forces
"The better you investment education, the better investment advice you will receive. "
"One of the first things you need to learn if you want to be a better investor is the difference between a sales pitch and sound investment advice. "
"The worst investments go to impatient investors. "
Part II Ask an Investor
Chapter 10. Four Reasons Why Some People Can't Become Power Investors
REASON #1: THE POWER OF THE WORD CAN'T
"If you think you can, you can. If you think you can't, you can't. Either way you're right."
—Henry Ford.
"Poor people and lazy people use the word can't more often than successful people. They use the word can't because it's easier than saying can. If you say you can't do something, you don't have to do it...even if you can."
"There are many lazy people who work hard. They continue to work hard because it is easier to keep working hard and go nowhere than to change."
"If you want your money to work hard for you, you cannot afford to be lazy."
REASON #2: THE POWER OF EASY
REASON #3: THE RICH MAKE IT EASY TO BE POOR
REASON #4: INVESTING WITHOUT GUARANTEES
Chapter 11. The Power of Power Investing"Power Investing is using all three asset classes, reinvesting cash flow, leveraged with OPM and accelerated by tax incentives."The three major asset classes are:
1. Business
2. Real estate
3. Paper asset
A business and real estate are far better investment for people with the skills to manage them.
For a professional investor, a major drawback of paper assets is that the investor, by not being active in management, gives up
business control over the asset.
"If investing in paper assets is like dating, and acquiring real estate is like getting married, then investing in a business is like being married with kids."
"If you want to be rich and be a great investor, you need to see the world through the eyes of a business owner and an investor, not as a worker who works for a business."
The formula of a professional investor1.
Invest my money into an asset.2. Get my money back.3. Keep control of the asset.4. Move my money into a new asset.5. Get my money back.6. Repeat the process.
