Review Rich Dad's CASHFLOW Quadrant: Rich Dad's Guide to Financial FreedomReview Rich Dad's CASHFLOW Quadrant: Rich Dad's Guide to Financial Freedom with a heavy emphasis on maximizing your earning potential with stocks and bonds. Taking the idea that the wealthy and poor both work for capital, but the wealthy always have capital to work with, the authors lay out an impressive financial philosophy based upon the maxim that capital-producing assets always give healthier bottom-line outcomes. At the same time, these funds are never a bad idea, and, as they grow over time, even incur profits along the way. The book further explores why buying fixed returns can be a smart move for any investor. The book concludes by recommending four specific categories of fixed return funds.
A common theme throughout the book is the author's overall attitude toward risk. He believes that risk should be embraced by investors, since it can deliver incredible profits at very low risk. However, he also recognizes that there are some risks involved in being a high risk investor. To offset this risk, he recommends taking advantage of index funds. He further explains that you should only use index funds if you are a conservative investor and use other types of funds only if you have an aggressive, risk-taking personality.
The primary recommendation of this book is to buy and invest in stock funds, which are easy to identify because they follow the basic index investment methodology. He further describes how to select the proper stock funds by identifying which funds complement each other in terms of risk and return. The book provides extensive research to explain why some stocks will outperform others. He discusses various types of stock funds including value stock funds, growth stock funds, and blue chip and specialty stock funds. Reviewing the risk factors associated with each type of fund further helps investors make the right decision.
Review the sections that focus on the reasons why Dad became a millionaire. The biographies of Rich Dad and his associates provide insight into their lifestyles and experiences. The book includes the birth certificates for both Wetmore and Bob. It provides detailed descriptions of the homes owned by each man and their respective businesses. The book includes the careers of each individual and the accomplishments achieved.
The book details the various investment techniques used by the couple. Most of the strategies provided are applicable for small, long-term investments like GIC's, bonds, and savings accounts. The section on mutual funds explains the different types of investment that can be performed with them. They are used as vehicles for stock and bond purchases, as well as for purchasing real estate properties. Investors who own mutual funds are less likely to suffer from the recent downturn in the real estate sector.
Review the sections that focus on Rich Dad's Cash Flow Formula. The formula is explained in detail and includes various scenarios. This section helps readers create their own Cash Flow Plan based on their current finances, investment goals, and needs.
Finally, it discusses investments that Rich Dad specifically made during his lifetime. The investments are broken down into categories like property and commercial real estate, partnerships, franchises, stocks and bonds, and insurance. The purpose of this section is to provide an outline of all the financial holdings and cash out strategies that Rich amassed. It is hoped that this financial information will assist readers in creating their own investment portfolio.
Review the section on Rich Dad's legacy. The focus of this section is to discuss the legacy left by Rich to his children and grandchildren. It includes how he managed to accumulate his fortune and his desire to pass on his wealth on to others. There is also a short biographical sketch of Rich Dads and his family. This is a great place to learn about the history of the richest man on earth.