The Stock Market Cash Flow. Andy Tanner

I lost my scholarship, I got kicked off the basketball team, I had to leave school. The stakes were high. It didn’t matter if making those mistakes helped me learn; all that mattered were my grades.

      If you take away the penalties the school system gives us when we make mistakes, then there’s no reason for mistakes to bother us at all. Think of it like a child learning to walk. When little kids stumble and fall on their backsides they smile and stand up again for another try. It doesn’t faze them in the least. Somewhere along the way we lose that very natural willingness to keep trying. I want you to regain it. Experience is a proven way to master something new. It may not be the fanciest way to do it; it may not be pretty. But I’ve spent enough time getting up off my backside and taking huge leaps forward to know that it works.

      For more practice at real-world financial scenarios without real-world consequences, play CASHFLOW^® 101 and 202, the board games Robert designed for the simulation of real investing with play money. These will help you practice your analysis and decision-making skills—and have fun while doing so.

      Don’t be a passive learner. Start being an active participant in your education now!

Chapter One

       Become a Great Investor by Becoming a Great Student

      When you hear the words “student,” “learning,” or “school” you might think about a period in your life that had something to do with words like “classrooms” and “homework” and “lectures.” But most of us can also think of times when we had some profound discovery experience outside a traditional classroom environment. For me, there’s nothing more exciting than when some piece of knowledge clicks and I get to watch it work. Like the first time I made a layup.

      Man, I practiced and practiced my layup. I spent hours, focusing on each of the mechanics—dribbling toward the basket, aiming the ball at that sweetspot, holding the ball right for the shot, making sure I had the correct foot forward at the correct time—and when the ball finally bounced off the backboard and fell through the net? That was a great feeling. Now I don’t even have to think about it. A layup comes as naturally as running.

      Investing has been the same way—though not nearly as tough on my knees.

      If you like the feeling of excitement and possibility that comes with new discoveries, you can look forward to this journey of investment understanding. This book—and how I go about teaching—is different from those stiff Wall Street gurus or talking heads you see on TV. How so? Simple: Their run-of-the-mill advice directs you where they want you to go instead of where you want to go. I’m on your team to take you only where you want to end up. Because I’m not going to teach you where to go. I’m going to teach you how to go wherever you want.

      We Are Both Students in This Together

      I want you to know that I’m a student, like you. I’m hungry for knowledge that is useful. I love the time I spend with my mentors and teachers, and I know that there will always be more to learn. When people claim they have all the answers, I think they lose credibility from the start. Because the topic of stock market investing is so large and ever-changing, no one can know everything about it. It’s a moving target, at best.

      This book is written to help folks who are beginners or people who see themselves as students with room to grow. Chances are that you and I are on the same path. I might be further along, but we’re both in the same jungle.

      When I started learning about the stock market, I was sick of being a blind follower. I was dependent on the advice of others, and I didn’t have a way to determine if that advice was good or bad. I wanted to make some intelligent decisions and contribute to discussions with my financial advisors instead of just doing what I was told. I wanted to feel confident. You’ve probably felt the same way with your own financial responsibilities.

      We are living in a very tricky time right now. The decisions you are forced to make about your future can be scary if you don’t know enough about investing.

      This book will help you face the future with confidence. It will give you the confidence to know there are always opportunities for you to profit in any type of market: up, down, or sideways. You won’t be dependent upon others or even the direction of the market. With education comes options, and with options comes confidence.

      Globally, we are rapidly approaching some very trying times. However, I’m convinced that you can prepare and profit no matter what happens.

      Advice Is Not Education

      Wall Street experts love to tell us what they think is best for our money, but they never seem to want to teach us anything. They like the relationship uneven. The less you understand about the stock market, the more dependent on them you will feel. They want you to be at their mercy. But I see people who are starving for real knowledge.

      The so-called “experts” love to give you lots of advice and opinions. But advice is very different from education. Advice is being told what to do, whereas education is receiving real understanding—the kind of understanding that allows you to make your own decisions as to what to do. Education is transformation.

      Today, you have the chance to choose the path of education and all of its rewards.

      Transformation Is Evidence of True Education

      For me, serving as a Rich Dad Advisor is a much different experience than many people might think. Frankly, my experience has been far more about my own learning and personal development than that of being a teacher. I have the gift of spending a lot of time with Robert and Kim Kiyosaki, and the other Advisors, so my opportunity to learn is both precious and humbling.

      Robert, of course, is a very skilled teacher, yet he is also an insatiable student. His passion for education runs deep and is a fundamental part of who he is. He often reminds me of what education is and where the word comes from.

       e·duce /Id(y)oōs/

       Verb: Bring out or develop (something latent or potential).

      Notice the word potential in that definition. To reflect upon all that we can choose to become is an exercise that is both exciting and staggering. You and I have the potential to land a 747. We can learn to play a musical instrument. We can learn to prepare a gourmet dish. We have the potential to build a house or sail a boat or speak a foreign language. The list is endless. In this light, the idea of education is elevated beyond the idea of merely transferring information from teacher to student. True education is about a transformational process that changes potential into real power.

      Education is the process of empowering us to be able to do something we could not do before. Transformation is at the heart of the Rich Dad Mission:

       To elevate the financial well being of humanity

      Context and Content

      Put simply, context is the big picture, content is the details. Information can be understood in various lights depending on the context in which it is held.

      The more you learn about investing, the more convinced you will be of the importance of context. What I mean by that is that many people want to be taught what to do before they are taught how to think. This is backward.

      Our context is often revealed by the questions we ask. The kinds of questions we Rich Dad Advisors often hear are along the lines of:

       “If you had $10,000, what would you invest in?”

      or

       “What was the most recent stock you purchased?”

      Yet almost no one ever asks these questions:

       “Andy, what are you studying right now?”

      or