Few books can change your life quite so dramatically as Rich Dad Poor Dad, by Robert Kiyosaki. For me, this book changed my life. It opened my eyes to the secrets of money, wealth and my comprehension of what to invest in. This article looks back at the lessons that can be learned if you read this book and opens up the horizons of investment opportunities to be made today.
Note: This guest article was written by Ayed Tahar from the blog e-amazonien.fr
Money, how useful is it?
We have all asked ourselves the same question about the value in the pursuit to always make more and more money.
Nowadays, money goes down in value not just as a result of inflation, but also because of a weak economic policy. The perfect solution would be to exploit it as much as possible. For example, you can buy a nice car, a luxury villa, or even the dream trip that you have always wanted! However, you should not forget that money can also generate real value. This is true when you buy real estate to rent out, start up your own company or invest in precious metals.
Robert. T. Kiyosaki, a wealthy businessman from Hawaii, raised the question on money when he spoke up about the lack of education and understanding of its real use.
He believes that the wealthy make money work for them, not the other way around.
This is the key to success for a successful investor.
To start with, money allows people to buy things, but it quickly becomes essential to the idea of investment. It can be utilized in four main ways to grow wealth: real estate, business, the stock market and the internet. These four approaches require commitment, interest and patience in order to master them. Unfortunately, there is no magic formula to succeed from one day to the next, so the ability to learn and persevere will always be your best ally.
When a strategy generates a steady and passive source of income that is at least 25% of your regular salary income, it is considered to be profitable. Let’s imagine that I earn 2000€/month and that my investments in the stock market generate 400€/month on a regular basis, this means that the “stock market” approach is a profitable approach. In the case where I would earn less than 400€/month with this method, I would have to rely on others to top up my passive income. Therefore, the profitability of one of these strategies can be defined in this way: it is the principle that it generates more than 25% of your monthly wages in a regular and passive income.
The 4 strategies to achieve wealth
The real estate strategy
The real estate strategy is not very profitable, but it is very reliable. It is also the easiest to understand and once implemented, it will continue to be the most reliable. Its low profitability will therefore be compensated for by the substantial amount of the investment. Whether it’s a rental or a purchase-resale, real estate is the most basic of all strategies, easy to access, easy to trust, and easy to manage for a well-informed investor. Its success is based on one of mankind’s greatest needs: to find a place to live.
The stock market strategy
This strategy is probably the most profitable of all, as long as you know exactly what to do. The stock market can be difficult to understand! However, if you learn carefully and thoroughly, it will be very profitable. For me, the stock market is an investment that I will consider at a later date. At the moment, I still have a lot more to learn and I invest in life insurance that gives me a return of 15 to 20% per year, which will allow me to remain financially independent when I retire. For me personally, the stock market doesn’t provide me with a high enough profit margin for now, because I don’t believe that I am knowledgeable enough to deal with the fluctuations and instability of the markets.
The strategy based on your own company or “business” approach
To start your own business is the ideal and ultimate goal of every investor who wants to be financially independent. Therefore, you should not confuse self-employment with a business. When you work on your own account (craftsman, trader…), you remain an employee (of yourself) because you are paid for the time that you are there. To be financially independent does not necessarily mean to be financially independent, although the reverse is true. The concept of business is that you sell physical products (goods or services) that do not rely on your presence. Your business will function without you, whether you are asleep or on your bike up in the mountains, and will make a profit. Provided, of course, that you design your brand and product, and identify a strong market niche. In conclusion, you need to understand the difference between when you work in and on your business.
The profitable nature of a tangible business is somewhere between that of the real estate approach and that of the stock market. This option is easier to learn than the stock market option, but the amount of knowledge needed to succeed is still higher than for the real estate option.
It’s apparent that a business has the most attractive conversion rate. For every consumer who visits your store, a purchase is very common. The conversion rate is therefore close to 100%. This is down to the fact that consumers can touch and see the product, and so evaluate it in a tactile and visual way.
The internet strategy
You shouldn’t be surprised that the internet strategy is profitable. Nowadays, most of the world is connected to the Internet and the number of people that use it increases every day. So how is it possible to make money and become wealthy with the internet strategy? Quite simply, through the creation of quality content such as blogs, articles, videos and through the sale of products or services. This method becomes very profitable when it addresses a specific need and doesn’t necessitate significant resources or knowledge. It allows you to target a broad customer base or to create a community in order to provide and find solutions to their needs.
A website that only offers virtual services has a low conversion rate due to the lack of direct contact between the customer and the product. However, this is offset by a significant number of additional visits that would not have been generated by a physical company. This virtual contact has a moral value that is difficult to quantify.
Blogs and the focus of a website on a product or a service are two possible options that are available to use for an internet startegy. So that this article isn’t even longer, I will elaborate on the strategy to use a blog, which accounts for most of my experience, although I will give my opinion on the website strategy at a later time.
To begin with, there are a few steps you can take to successfully establish a blog idea.
First, it is useful to list your passions, as well as your skills, in order to identify your strengths and evaluate the economic potential of each one, with the help of the appropriate tools.
Some countries are advanced in their ideas, research and technology, while others are not. Travel to these countries allows you to travel back in time. When it comes to technology and entrepreneurship, for example, the United States and Japan are several years ahead of European countries. These countries can provide you with innovative ideas. Other countries can help you come up with some good ideas.
A wonderful blog idea is a good start, however, what is the formula for a successful blog?
The three major foundations of traffic, expertise and trust lead to a successful blog.
- Traffic: traffic is the primary asset of a blog as it is its audience. The subject must arouse interest and be searched by users to bring a good number of visitors to the site. Google search can be optimized if you focus on organic search and SEO (Search Engine Optimization).
- Expertise: Expertise is when you have experience in a field and you can demonstrate that you are known for it. There is the internal or intrinsic expertise that corresponds to your skills as well as the perceived or extrinsic expertise that you convey to your audience. Competent people can sometimes find it a bit of a challenge to portray a good image and to sell themselves effectively. The perceived expertise is then, inferior to their internal skills. A wise entrepreneur knows that ethical marketing is critical to accurately reflect their intrinsic expertise and that even the best products need effective marketing.
- Trust: Trust is necessary because customers want to interact personally, to know the person and to communicate with them, in spite the distance involved. These days, people expect to be valued and treated with respect and not just be a number, a victim of a large unscrupulous company.
Next, it is important to set up a system called a sales tunnel (funnel) that will allow the site to be referenced on search engines and drive more traffic to your blog.
In order to address the audience, you need to be able to reach them. To do this, a free offer, such as a free book or video; allows you to collect information from prospects, who sign up and give you their email addresses. If you can get them to subscribe to your blog and then give you their personal information; it is another way to do this. Once you have done this, you can offer something of greater value that can be delivered, such as a new product launch that resolves the customer’s problem.
There will be a whole range of various issues to deal with, such as weight loss, travel; and the need to earn more money. Your potential customers are in the best position to educate you and answer any questions that you may have. Simply ask them: What is it that prevents you in the ability to accomplish your goal today? If you can create a number of avatars that represent your customers, it will be easier to communicate with them.
A blog allows you to share your passions and ideas. It can also allow you to generate an additional source of income. In order for it to become an effective profit generator; you must constantly publish new material and invest time and effort in it or; alternatively, choose e-commerce or online service options. These methods allow you to provide content on a weekly basis; but means that you don’t have to provide it yourself.
Above all, don’t try to be a total perfectionist. It’s better to be imperfect and do something. No one expects perfection from the moment you start.
Blogs can help you have the lifestyle you want. Your ideas, your products or your business can take advantage of the leverage that the internet provides. In any case, it will allow you to broaden the range of what you know and are able to learn.
This table summarizes the 4 strategies:
|Profitability||Very high||Low||High||Very high|
|Conversion rate||N/A||N/A||Very high||Very low|
In comparison to the stock market strategy, which requires you to learn and develop your skills beforehand; the profit that you can make through the internet strategy is roughly equal to that of the stock market route; without the need to spend a lot of money beforehand; and offers the advantages of all the other approaches. If you sell online it is the most economical and efficient approach; especially if the low conversion rate is offset by the creation of an actual business.
Conclusion: What to invest in?
To be able to grasp what you should invest in and what you should do with your money is the crux of the matter. Money certainly allows you to live, but it must be invested. This is the main idea behind Robert Kiyosaki’s book.
To put your money in a bank account is not the first thing you do. If you put your money into one of the four strategies to make you wealthy; namely real estate, the stock market, a physical business or the Internet; would be the ideal choice. Whatever strategy you decide upon; it must correspond to your own characteristics; as well as fit in with your interests and aspirations more than the others. All that you have to do now is to choose where to invest your money.
Even if the first results are not as you hoped they would be; carry on and push yourself to surpass your initial expectations. You will be able to show the world, and yourself; that your business model is profitable even with a small amount of time, energy and expenses involved.
Market research online can provide important information and minimize the guesswork. Identify your brand name and recruit qualified people who find your product(s) of interest and who think they will be in demand. Lastly, develop your sales strategy and a come up with a great sales slogan, based on surveys that you carry out.
You are welcome to visit my blog e-amazonien.fr to find out how to combine the strategy used when you have an actual business aligned with online sales and become an Amazon FBA annuitant.
Thank you very much.
See you soon and I look forward to your success!