Five Levels of Investors My point is that it is never the investment or asset class that is important. Success or failure, wealth or poverty, depends solely on how smart the investor is. A smart investor will make millions in the stock market. An amateur will lose millions. Tragically, most people do not think learning to invest is important. This is why most people believe investing is risky and turn their money over to “experts,” most of whom are not really investors, but sales people who make money whether the investor makes money or loses money. There are five types or levels of investors found in the I quadrant.
Five Different Levels of Investors Level 1: The Zero-Financial-Intelligence Level Sadly, in America, once the richest country in the world, over 50 percent of the U.S. population is at the bottom level of the I quadrant. Simply said, they have nothing to invest. There are many people who make a lot of money who fall into this category. They earn a lot—and spend more than they earn. I have a friend who looks very rich. He has a good job as a real estate broker, a beautiful wife, and three kids in private school. They live in a beautiful house overlooking the Pacific Ocean in San Diego. He and his wife drive expensive European cars. When his son and daughters were old enough, they too drove expensive cars. They looked rich, but what they had was debt. They looked rich, but were poorer than most poor people. Now, they are homeless. When the real estate market crashed, they crashed. They were no longer able to pay the interest on all the debt they had accumulated. When we were younger, this same friend made a lot of money. Unfortunately, it was his low financial-intelligence level—zero—that caused him be a zero over the long run. In fact, he is so deeply in debt that he is really a sub-zero investor. Like many people, everything he buys loses value or costs him money. Nothing he buys makes him richer. 214
by Rich Dad, Robert Kiyosaki