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Unfair Advantage On the flip side, most of the properties Kim and I purchase produce income after all expenses and debt. Knowing the difference between cash flow and capital gains gave us an unfair advantage. The reason we look at so many properties is because finding properties that provide cash flow can be daunting. The good news is that finding properties that provide cash flow in a crash is easier, because prices are lower. The biggest losers during this financial crisis were people who invested in liabilities, hoping for capital gains. When the markets crashed, their cash flowed out. Average investors invest for capital gains. Capital-gains investors are not really investors. They are traders, buying with the intent of selling for a higher price (or a lower price, in the case of shorting a market). True investors invest for both capital gains and cash flow. True investors also invest for tax breaks, using as much OPM (other people’s money) as possible. Knowing how to do this is an unfair advantage. Below is a diagram showing the differences between assets and liabilities.

INCOME STATEMENT Income

Expenses

BALANCE SHEET Assets

Liabilities

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Profile for Jamiel Cotman

Unfair advantage ebook  

by Rich Dad, Robert Kiyosaki

Unfair advantage ebook  

by Rich Dad, Robert Kiyosaki

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