I was listening to an audio by Robert Kiyosaki on this topic, “How to find great Investments” and I’ll like to share with you some lessons.
Some people see saving with the banks as an investment, others refer to mutual fund investments as great investment but to Robert Kiyosaki they are not great. And I kind of side with him a little, knowing where he is coming from. With regards to the Ghanaian economy, gaining 20% to 30% on an investment like a mutual fund could be a great investment considering the effort and time put in it.
The best investments are the ones you can control, according to Robert. And education is what gives you control. The more you know about an investment being it Stocks, Businesses, Real Estate, Options or forex trading etc, the more you have control and the more you stand the chance of succeeding.
In order to be a successful investor, you need to look for VALUE. Yes, where is the value, and then you project the value into the future. How much will this be worth 5 years from today when I fix this or that or make this or that changes?
Real wealth builders should look at starting a business or real estate according to Kiyosaki.
Principles for Investment into Businesses:
1. Know how to read and interpret the numbers. The numbers tell a story and you have to be able to understand the numbers to understand the story. You need to have control over financial statements.
2. Learn the vocabularies involve in running a business.
3. Start small.
4. Note that it is your education that makes you money and not the amount you invessted.
5. Cash flow is key to growing a business. Look for cash flow. It is the amount of money that comes in and goes out.
6. Watch the trend. Know the trend because they impact your business. Some trends could be technology related. Understand the trend and the industry.
7. Look for great partners.
Principles for Real Estate Investments:
1. Invest first for cash flow and then for capital gains.
2. Use leverage when investing.
3. See investments with your mind.
4. Train your mind to see what your eyes cannot see.
5. Invest some time in your education.
6. Make the necessary links.
7. Dont risk your money investing in mutual funds.
8. Pit in the time and the effort.
9. Find a property that is losing money or not making money and make it into one that makes money.
10. The Income of your properties are affected by Your Rent, Vacancy Rate, (look for properties that are being mismanaged. High Vacancy is an opportunity) and finally Other Income (renting out parking space etc)
11. In finding a good investment, one of the first thing to ask yourself is, what’s my experience, what are you good at.
Investing is a fun game to play. Start it and enjoy playing.