Ultimate Investor

Two weeks ago, while I was on vacation, I read Kiyosaki’s Guide to Investing, which is the third book in his Rich Dad, Poor Dad series. While it focused more on the mental preparation rather than the specifics of starting a business and investing in real estate or financial instruments, it spurred me even further to work on my financial plan. I am now convinced, more than ever, that I need to educate myself about business, finance, and accounting. Also, I would like to start a business sooner, rather than later. Starting small by buying a food franchise or purchasing rental property would allow us to learn about aspects of business we cannot read from books.

I will continue studying about fundamental and technical analysis, and begin trading within the year so I can become a qualified investor. I need to study more about finance, accounting, corporate and tax law in order to become what Kiyosaki calls a sophisticated investor. The final goal, according to Kiyosaki, would be to be an ultimate investor, that is, one of the investors who invest even before an IPO.

I have come a long way since I first read Rich Dad, Poor Dad. At that time, I was working for a call center and I was barely able to make ends meet with my salary. Things became worse after that as I unexpectedly became a young husband and father and began accumulating credit card debt. It took me nearly half a year to pay down that debt. My wife and I had the good sense to realize we were falling into the middle class trap so we were able pull back from the precipice. Now we are more than halfway on our road to becoming millionaires. One million pesos does not count much these days, but it will definitely give us the confidence to aim for financial freedom.

Since we have a long time horizon, I am using dollar cost averaging as a strategy, and I am investing about 60% of our monthly income in a mutual fund composed mainly of equities. It has been a scary ride because of the global financial crisis, with my portfolio losing as much as 25% of its value, but now I am almost breaking even.I feel confident, however, that I will be making a lot of gains in the medium to long term.

My journey to financial freedom has just started. I am sad to see how many more people can benefit from the concepts explained by Kiyosaki. People my age think nothing of buying doodads such as new cars, cellphones, and even condominium units. Many run out of cash the week before payday. I fear they will wake up at 50 with a home mortgage restructured several times and a lot of debt on several credit cards with no provision for their retirement, which is what happened to people I love dearly. Money is a sensitive and emotional topic and it won't be easy to convince people to change the way they spend, but I think it would be irresponsible for me not to try and influence the people that are close to me. I will escape the rat race and I will bring along as many people as I can.