Sharing Daily Discoveries About Personal Finance And Business Topics

Chapter 9

The Two Things You Invest

The main point throughout the chapter is that people can only invest two things: Time and Money. As usual, Kiyosaki gives his take on the matter first and mentions how most people invest their money, but not their time. He then used this diagram to demonstrate three types of investors in regards to this:

Three Types of Investors

Essentially, the point he is trying to get across is that an active investor has a lot of financial education which is where you want to be in. He then talked about how people take advice from so called “financial experts” and how easy it is to become one which is suppose to make you think twice about taking their suggestions from what I read. For example, he states that it is faster to become a licensed massage therapist than it is to become a financial advisor. Basically, investing in one’s financial education is one of the key reasons why Donald Trump and himself are wealthy as they constantly learn everyday.

Robert Kiyosaki then further talks about this by saying how it is more about the quest for knowledge that makes him rich rather than the money. Basically, money is just a scorecard to tell you how successful you are and having a lack of money shows that there is something more that you need to learn. I tend to agree with that personally. One example he used was how Tiger Woods has been quoted saying how he plays golf to master the game and that money is a measure of his mastery. He then also reiterated from a previous point how Donald Trump and himself win at the game of money because they treat it like one. A chart was once again used to describe about a passive and active investor:

Passive and Active Investors

An interesting point to all this treating money as a game thought was how he was advocating that games are a good teaching tool and used a chart that was apparently created back in 1969 called “The Cone of Learning” which outlined the effectiveness in various ways of making people learn about something. It looked like this:

Cone of Learning

Donald Trump then throws out his thoughts and how he pretty much agreed with Robert Kiyosaki’s view. Because of that, he simply just emphasizes the importance of time as money can always be recouped one way or another. If you run out of time, then no money in the world can change that. He then used an example that I definitely advocate myself as well on how if people viewed their time as money, most likely they would be more careful with it. He ends by saying how money affects most people in one way or another and that it is wise to know as much as you can about something that has a lot of impact in your life such as by investing in your financial education when it comes to money.

There are a lot of interesting examples in this chapter with some new reference tools that I have never seen before and that scorecard mentality when it comes to money is something I agree with. A lot of the talk about time and money, especially Donald Trump’s examples, reminds me on how I personally see money as a time issue which I also blogged about in the past in a post called the Value of a Dollar. The funny thing I thought was how Kiyosaki was promoting on how you can learn about money and finance very well by playing games and like I mentioned in my blog post I actually learned a lot of my financial habits from playing video games that required you to deal with money. So, I guess I am a living example that playing games can be an effective way in teaching you how to be good with money.

One thing I was thinking of though is that they say how people can only invest with time and money. I have always believed that there were three things that people can invest with: Time, Money and Resources. Guess it all depends on how technical you want to be in regards to this.




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