Collection: Financial Literacy - #10 Robert Kiyosaki '6 Controls of Active Investors'



[Transcript]

ROBERT KIYOSAKI 00:00

How many people have heard investing is risky?


Good. What this section is about of this program is how risk isn't anything, but lack of control. The number one difference between an active investor and a passive investor is a subject of control.


So what I'm going to show you tonight is how – what I do as an active investor is I want control. If I have control I don't have any what? Risk. And that's the difference.


So using a metaphor that most of us can understand, over here, we have, you know, an example of a car. Okay?


Now, how many people realizing there's risk driving a car?


Good. But car driving doesn't have to be risky. Like those guys want you to believe investing is risky. So some of the controls – the six controls our car must have; number one is a steering wheel, right?


How many people would not buy a car if it had no steering wheel? Good, you know what I mean. (Laughter) So I'm gonna sit down here like this – so I sit down I get in my car.


And control number one, I want to check on is I have a steering wheel. Control number two, gas pedal. Now you have a gas pedal, you better have some what? Brakes [Number 3]. How many people have ever driven a car without brakes? You know, you don't need coffee for about six weeks after that. (Laughter)


And then you have a forward and reverse, you know, gear shift like this [Number 4]. The other thing you also have to have is a driver's license for driver's ed [Number 5]. And you have to have insurance [Number 6].


So if I'm driving down the road, you know, doing a little bit too fast. I hear – (Siren) – the cop pulls me over, the policeman pulls me over, what's the first thing a policeman asked me for? Driver's license and proof of what?


Insurance. How many people would not let somebody who was uninsured drive your car? How many people would not let somebody who had no driver's ed drive your car? You know what I mean.


That's stupid but that's what investors are doing. They're actually investing in savings, stocks, bonds, mutual funds with no control and what happens? That's like going like this...


And that's why they think it's risky. Now, this is the worst part. Guess who else has no control? Your financial advisor.


Your financial advisor...


Diversify, diversify, diversify or what they do is this, is they go... Oh I predict this, I predict that. That's the kind of financial advice most people are getting. You know, that's risky.


That's not what I do. I want control. So let me help get out of this rack – So when I'm as an investor, I want six controls too. If a car has six controls, I want six controls as an investor;

  1. Control number one – you look on the screen over here – is I want control of my income.

  2. Control number two, expenses.

  3. Three is asset value.

  4. Four is liability.

  5. Five is I want financial education or management.

  6. And six, I want insurance.


Those are the six controls, I want as an active investor.


(Source: https://youtu.be/0854UWAv8xA)

 

[YAPSS Takeaway]

Investing is not risky, but a lack of control is. Therefore, before you invest you got to have control over your income, expenses, assets, liabilities, financial education and insurance.