he’s an active and well-known real
estate investor a large portion of his
business empire and wealth is based in
real estate investing he’s written books
held seminars made videos and coaches
people on how to be successful real
estate investors mentor me Robert
one of the things that makes the rich
dead company different is most people
think that savings is smart but my Rich
Dad told me years ago that savers are
losers now I know this goes against the
grain what most people tell you you know
save money save money save money but the
reason savers are losers began back in
1971 and in 1971 President Nixon took
the u.s. off the gold standard and made
the US dollar the reserve currency of
the world one of the reasons we have so
much economic volatility in our economy
today high gas prices high food prices
stock market booms and busts as housing
values going down all can be attributed
back to 1971 plus there are other
changes so what makes a Rich Dad company
different is that we do not really
subscribe to the idea of being a saver
we think it’s more important you learn
to being an investor you know like if
you had invested in oil 10 years ago
you’d be a rich person today even though
savers are losers you vested in gold ten
years ago you have been a lot better off
if you had invested in rental real
estate ten years ago it would been way
ahead of the savers so if you want to
get ahead you need to not be a saver but
learn should be an entrepreneur or an
investor so there’s four great
advantages to real estate as an
investment number one is you have income
every month which means you can soon
quit your job if you want to number two
is that you have tax advantages you know
there’s so many tax advantages to number
three is you have depreciation right
which is another form of tax tax
advantage and number four is you have
capital gates so you have money coming
in government’s giving all these bonuses
right you have all these gains are
somewhat tax free and on top of all that
is the banker will lend you money for
real estate when I was just 9 years old
my rich dad began to teach me how to
become a real estate investor
and the way he taught me was through
that game most of us know about the game
called Monopoly and he said son on this
game board Monopoly is a formula for
great wealth and most of us know that
formula it’s for green houses one red
hotel for green houses one red hotel and
that’s how my real estate investment
career began with that simple education
and lessons for my rich debt and that is
why I was able to retire in 1994 at a
relatively young age of 47 because of
the simple investments test my rich dad
taught me in any market markets move up
markets move down and markets move
sideways they’re called trends so what
you want to look for is the area
hopefully that’s moving up would you
agree with that title II yes we you know
like we always talked about the some
cities where people are moving out of
there any decline right and people are
moving into right and generally where
would you rather invest what obviously
where people are moving into but the
interesting thing is unlike the stock
market where it’s very difficult to know
which markets are going to go up in
which areas of that market are going to
go down with real estate you can follow
the trends because they’re slow so that
they’re so slow to evolve a city that’s
had high growth or one year as likely to
have had high growth the year before and
will have high growth the following year
and similarly those with with slow
growth so it’s very easy to figure out
which cities and which suburbs within
cities and which clusters of streets
within suburbs are likely to do well in
the future just by watching the past and
you don’t get that luxury of many other
markets they’re far more fickle and
volatile right so in any market any
investment you have to watch a trends
there’s always three trends up down and
sideways another way people become very
successful in choosing the area first is
sometimes you look for an area that’s
been down for years and all suddenly it
comes back to life again those are
really good aren’t that great and then
the trick is finding when it’s at the
bottom because then it’s about to take
off and the prices are really low prices
alone most people make the mistake of
buying when it’s at the top the thing
while this is going really well and they
buy at that peak and then the only way
to go along as sideways or down again
right and if you’re just starting out
let me give you one more tip that I
learned the hard way my first investment
property I bought on another
Allanon Island from Hawaii so I had a
problem in this piece of property I
meant I had to catch a plane fly there
rent a car and go check my property and
so this problem persisted for a while
and so for two days a week I was getting
on a plane flying to another island
renting a car look at this property so
that added to the next thing if you’re
going to find an area make sure it’s
close to your house and so I would
recommend this is find an area that’s
you can even walk to you know in some of
my in my book I talk about how the first
investment property that Kim and I
bought together I used to jog pass this
neighborhoods so if it’s close enough to
jog to it’s close enough it’s a great
area or find an area that you can drive
when you’re you know going back and
forth to work the reason is when you’re
first starting out you’re bound to make
a few mistakes so make sure the area is
close by it’s a little good this good
choice well I’ll say it again in 1973 I
came back from Vietnam and I was a pilot
up there and I took a real estate course
it was $385 three days long and that’s a
lot of money back that I was only making
$500 a month so 385 was all I had and
the instructor the end of the program
said to me he said what did the whole
class full of 30 of us he says your
education begins now that you leave the
class even get educate Wilder class so
his assignment was that everybody or
thirty of us with the Parapan team get
up in teams to two or three a team and
we have to look at 100 properties in 90
days and he says don’t buy anything just
look at 100 properties do an evaluation
of each property write-up write a short
blurb about it why it’s good why it’s
bad and it’s at the end of 90 days and a
hundred properties then you make up your
mind if you’re going to buy something he
says if you haven’t found a one property
in 100 100 deals you start again you
know you start again with another
hundred and that’s what most that’s why
most people are not rich they’re not
willing to go through that process of
looking at a hundred deals to find one
deal and this sometimes in the
and I know you look at a lot of frogs to
find one princess you know but when you
find that one princess everybody goes oh
well how do you get so lucky well I
looked at a lot of dirt dirt dogs out
there you know and that’s like anything
in life you don’t marry the first man or
woman you meet
hopefully you kiss a couple of old men
before you do after you’ve identified
the area that you want to invest in
hopefully one that’s going up at that
point you begin looking at properties
the actual sticks and bricks as I call
it now Dolph do you care if the
property’s ugly not only do I not care I
like it if the property is ugly you like
problems right well they’re not problems
between their challenges you see if
there are problems they’re perceived
problems and everyone else values that
property very lowly right but I know
that for a very small expenditure I can
massively increase the value of that
property so I love challenges right so
that’s that’s why I say to people fall
in love with the area but not
necessarily the house in fact a lot of
times I look for the best area with the
ugliest house right and only at that
point the way I start looking at
multiple properties I don’t want to get
attached to any ones that correct
correct and you have to look at a lot of
properties people make the mistake of
looking at two or three and trying to
make a decision you’ve got to look at
dozens and dozens and all of a sudden
one more pop out as being spectacular
yeah sometimes you walk into a property
that’s not even listed because because
you’re looking around right right it
might be for sale by owner or something
like that or people here that you’re
looking to say well actually my cousin’s
got one for sale I wonder what he wants
for it right so after you find this area
you become this expert and once you
become this expert let’s say you’re
jogging or riding your bike around that
everybody knows you’re looking for
investments suddenly people start giving
all these great deals and these
properties so that’s the next step after
you’ve identified the area then you
start looking for the properties and
oftentimes I don’t really care if
they’re bad in fact you know some of
them can be too bad
or too broken but you’re looking for
problems sometimes or sometimes they
don’t have to be a problem is just great
deals one of the most famous ways people
use options is a down payment so let’s
sing on it buy a house for let’s say
$100,000 and I go and I put $10,000 down
some people call this a down payment but
what this
10,000 means to know and then the bank
gives me 90,000 going to use the bankers
money to get rich the reason I look at
this as a doubt as an option by anything
else is because if the price goes to
$120,000 I know the option to sell it
for a higher price the risk is if it
goes down then I can’t get in trouble as
that’s true with any kind of option so
that’s one of the ways that options are
used in real estate and again for me
from my perspective on it they down a
real estate down payment is an option to
either buy this property later on or
refinance it or and then the beauty of
real estate is this if the price of this
property goes up the bank still only
gets $90,000 let’s say it goes to
$150,000 you get the $50,000 but the
banks still gets a 90,000 that’s why I
actually love real estate I love the
idea of options in it another way an
option can be used is you can go up to a
seller and somebody as a house and say
look in three years I want to buy your
house for ten thousand dollars or
something like you know ten thousand
dollars more than you all right now and
here’s my paper but just give me the
first right to buy it and generally
generally have to give them something
like $1,000 for that right for that
option that’s not the way it’s used
another way options are used in real
estate which I use quite often is let’s
say I go up to a project and they say
we’re going to break ground in one year
on this apartment condominium project
and you can buy a condominium right now
before it’s even built so it’s called a
pre-construction purchase it’s also
called buying off the plants in other
words and I don’t recommend this
wholeheartedly but off the plans means
the building’s not even built yet but
you go up to the developer because they
have to sell so many of these projects
they have to sell so many units or get
so many buyers committed to them so
let’s say I give them $1,000 down the
price is $50,000 today and three years
from now when the project is completed
the project’s worth $150,000 at that
point I don’t have to buy the project I
don’t have to finance this hundred
$50,000
what I can do is just basically sell my
position my option to somebody else for
the hundred thousand dollars and they
can buy the property also so I do all I
do all these types of options and real
estates and even at right now I’m buying
six units off the plans the buildings
aren’t even built yet but I’m putting an
option down in three years hopefully
into skull speculation not investing
because then speckling the price will go
up the option just assures me that’s a
certain price today and I’m hope I’m
betting that the price will be higher in
the future so these are the types of
ways options are used in real estate
also as an additional point I’d like to
add that when you find in your area in
identifying pieces of real estate this
is where your broker becomes very
important not all brokers are equal not
all brokers are the same intelligence as
you’re going through the area and
looking at different properties you’ll
soon find out the brokers you like and
brokers who like you right right and
then also not all brokers work with
investors most of them work with home
buyers especially the first time you
know so there’s you know the kitchen is
important you know how pretty is the
paint and all that what we don’t care
about that so on top of finding the
right broker yet the find one that
understands you and hopefully is an
investor himself or herself right most
brokers that understand you that have
the same mentality our investors and
don’t ever be put off by a broker who is
an investor don’t think well if there’s
any good deal that comes along he’ll
take it for himself
no broker can buy every deal that comes
across as desk yeah the advantage of a
broker that does invest as he
understands the mentality understands
what we’re after that we don’t care
whether the deli on the corner is good
or not
we just want a good deal yeah investors
think different than homebuyers real
estate agents focus on the house and not
the market so what I’m watching for or
listening for hoping to hear is we I
have a real estate broker who is the
same thing with me is it looking at the
area first the property second exactly
and when you find a good broker pay them
well I meet so many people who will tip
their waiter 20% but try and stuff the
broker 6% or whatever the Commission is
you know that’s tipping somebody who’s
costing you money rather than tipping of
somebody who can make your
I like to pay my brokers everything I
mean I like making them rich because
they making me rich to what I do what
real estate guys do is opposite of what
stock and currency guys do right so I
don’t save money you know I used it
right and in 2007 when the US market
went down with the real estate market my
partners and I borrowed a half a billion
dollars not ran dollars right and we
bought the best real estate possible and
it was wonderful and then what happened
in a few few months ago 2014-2015 they
also re will refinance from five percent
to two and a half percent well so
imagine our debt service going down by
50 percent
it’s our cash flow went up now when I
talk to the average person I don’t care
if there are PhD in economics I really
don’t understand what I’m saying
there so how can you make money off of
debt absolutely and the reason is is
because that’s what the rich really do
is they use debt and taxes to get rich
and the poor the middle class debt in
taxes makes it poor how accessible
really is real estate investing to the
average Joe investor that wants to get
away from the mainstream it’s always the
same thing is that real estate is the
best investment of all there’s two
reasons why Real Estate’s the best
investment time-honoured which you’re
going to be smart at it then the number
one reason for real estate is debt you
know who else is going to give you money
to buy you know they don’t give you
money to start a business so they don’t
give you money to invest in oil but they
give you money to buy real estate so
debt is the key so as I covered my book
second-chance debt makes the rich richer
and secondly taxes make the rich richer
so when I buy real estate is the last
investment where I can make millions of
dollars and pay zero tax legally so the
irony of it is these guys who are
investing in the stock market
they don’t really have any advantages
for debt there’s some little bit and
they have no real tax advantages that’s
stupid
so I don’t care what you say about good
markets or bad markets good real estate
bad real estate real estate is the last
great investment number one for debt
number two for taxes thank you so much
for watching continue to believe and
I’ll see you soon
estate investor a large portion of his
business empire and wealth is based in
real estate investing he’s written books
held seminars made videos and coaches
people on how to be successful real
estate investors mentor me Robert
one of the things that makes the rich
dead company different is most people
think that savings is smart but my Rich
Dad told me years ago that savers are
losers now I know this goes against the
grain what most people tell you you know
save money save money save money but the
reason savers are losers began back in
1971 and in 1971 President Nixon took
the u.s. off the gold standard and made
the US dollar the reserve currency of
the world one of the reasons we have so
much economic volatility in our economy
today high gas prices high food prices
stock market booms and busts as housing
values going down all can be attributed
back to 1971 plus there are other
changes so what makes a Rich Dad company
different is that we do not really
subscribe to the idea of being a saver
we think it’s more important you learn
to being an investor you know like if
you had invested in oil 10 years ago
you’d be a rich person today even though
savers are losers you vested in gold ten
years ago you have been a lot better off
if you had invested in rental real
estate ten years ago it would been way
ahead of the savers so if you want to
get ahead you need to not be a saver but
learn should be an entrepreneur or an
investor so there’s four great
advantages to real estate as an
investment number one is you have income
every month which means you can soon
quit your job if you want to number two
is that you have tax advantages you know
there’s so many tax advantages to number
three is you have depreciation right
which is another form of tax tax
advantage and number four is you have
capital gates so you have money coming
in government’s giving all these bonuses
right you have all these gains are
somewhat tax free and on top of all that
is the banker will lend you money for
real estate when I was just 9 years old
my rich dad began to teach me how to
become a real estate investor
and the way he taught me was through
that game most of us know about the game
called Monopoly and he said son on this
game board Monopoly is a formula for
great wealth and most of us know that
formula it’s for green houses one red
hotel for green houses one red hotel and
that’s how my real estate investment
career began with that simple education
and lessons for my rich debt and that is
why I was able to retire in 1994 at a
relatively young age of 47 because of
the simple investments test my rich dad
taught me in any market markets move up
markets move down and markets move
sideways they’re called trends so what
you want to look for is the area
hopefully that’s moving up would you
agree with that title II yes we you know
like we always talked about the some
cities where people are moving out of
there any decline right and people are
moving into right and generally where
would you rather invest what obviously
where people are moving into but the
interesting thing is unlike the stock
market where it’s very difficult to know
which markets are going to go up in
which areas of that market are going to
go down with real estate you can follow
the trends because they’re slow so that
they’re so slow to evolve a city that’s
had high growth or one year as likely to
have had high growth the year before and
will have high growth the following year
and similarly those with with slow
growth so it’s very easy to figure out
which cities and which suburbs within
cities and which clusters of streets
within suburbs are likely to do well in
the future just by watching the past and
you don’t get that luxury of many other
markets they’re far more fickle and
volatile right so in any market any
investment you have to watch a trends
there’s always three trends up down and
sideways another way people become very
successful in choosing the area first is
sometimes you look for an area that’s
been down for years and all suddenly it
comes back to life again those are
really good aren’t that great and then
the trick is finding when it’s at the
bottom because then it’s about to take
off and the prices are really low prices
alone most people make the mistake of
buying when it’s at the top the thing
while this is going really well and they
buy at that peak and then the only way
to go along as sideways or down again
right and if you’re just starting out
let me give you one more tip that I
learned the hard way my first investment
property I bought on another
Allanon Island from Hawaii so I had a
problem in this piece of property I
meant I had to catch a plane fly there
rent a car and go check my property and
so this problem persisted for a while
and so for two days a week I was getting
on a plane flying to another island
renting a car look at this property so
that added to the next thing if you’re
going to find an area make sure it’s
close to your house and so I would
recommend this is find an area that’s
you can even walk to you know in some of
my in my book I talk about how the first
investment property that Kim and I
bought together I used to jog pass this
neighborhoods so if it’s close enough to
jog to it’s close enough it’s a great
area or find an area that you can drive
when you’re you know going back and
forth to work the reason is when you’re
first starting out you’re bound to make
a few mistakes so make sure the area is
close by it’s a little good this good
choice well I’ll say it again in 1973 I
came back from Vietnam and I was a pilot
up there and I took a real estate course
it was $385 three days long and that’s a
lot of money back that I was only making
$500 a month so 385 was all I had and
the instructor the end of the program
said to me he said what did the whole
class full of 30 of us he says your
education begins now that you leave the
class even get educate Wilder class so
his assignment was that everybody or
thirty of us with the Parapan team get
up in teams to two or three a team and
we have to look at 100 properties in 90
days and he says don’t buy anything just
look at 100 properties do an evaluation
of each property write-up write a short
blurb about it why it’s good why it’s
bad and it’s at the end of 90 days and a
hundred properties then you make up your
mind if you’re going to buy something he
says if you haven’t found a one property
in 100 100 deals you start again you
know you start again with another
hundred and that’s what most that’s why
most people are not rich they’re not
willing to go through that process of
looking at a hundred deals to find one
deal and this sometimes in the
and I know you look at a lot of frogs to
find one princess you know but when you
find that one princess everybody goes oh
well how do you get so lucky well I
looked at a lot of dirt dirt dogs out
there you know and that’s like anything
in life you don’t marry the first man or
woman you meet
hopefully you kiss a couple of old men
before you do after you’ve identified
the area that you want to invest in
hopefully one that’s going up at that
point you begin looking at properties
the actual sticks and bricks as I call
it now Dolph do you care if the
property’s ugly not only do I not care I
like it if the property is ugly you like
problems right well they’re not problems
between their challenges you see if
there are problems they’re perceived
problems and everyone else values that
property very lowly right but I know
that for a very small expenditure I can
massively increase the value of that
property so I love challenges right so
that’s that’s why I say to people fall
in love with the area but not
necessarily the house in fact a lot of
times I look for the best area with the
ugliest house right and only at that
point the way I start looking at
multiple properties I don’t want to get
attached to any ones that correct
correct and you have to look at a lot of
properties people make the mistake of
looking at two or three and trying to
make a decision you’ve got to look at
dozens and dozens and all of a sudden
one more pop out as being spectacular
yeah sometimes you walk into a property
that’s not even listed because because
you’re looking around right right it
might be for sale by owner or something
like that or people here that you’re
looking to say well actually my cousin’s
got one for sale I wonder what he wants
for it right so after you find this area
you become this expert and once you
become this expert let’s say you’re
jogging or riding your bike around that
everybody knows you’re looking for
investments suddenly people start giving
all these great deals and these
properties so that’s the next step after
you’ve identified the area then you
start looking for the properties and
oftentimes I don’t really care if
they’re bad in fact you know some of
them can be too bad
or too broken but you’re looking for
problems sometimes or sometimes they
don’t have to be a problem is just great
deals one of the most famous ways people
use options is a down payment so let’s
sing on it buy a house for let’s say
$100,000 and I go and I put $10,000 down
some people call this a down payment but
what this
10,000 means to know and then the bank
gives me 90,000 going to use the bankers
money to get rich the reason I look at
this as a doubt as an option by anything
else is because if the price goes to
$120,000 I know the option to sell it
for a higher price the risk is if it
goes down then I can’t get in trouble as
that’s true with any kind of option so
that’s one of the ways that options are
used in real estate and again for me
from my perspective on it they down a
real estate down payment is an option to
either buy this property later on or
refinance it or and then the beauty of
real estate is this if the price of this
property goes up the bank still only
gets $90,000 let’s say it goes to
$150,000 you get the $50,000 but the
banks still gets a 90,000 that’s why I
actually love real estate I love the
idea of options in it another way an
option can be used is you can go up to a
seller and somebody as a house and say
look in three years I want to buy your
house for ten thousand dollars or
something like you know ten thousand
dollars more than you all right now and
here’s my paper but just give me the
first right to buy it and generally
generally have to give them something
like $1,000 for that right for that
option that’s not the way it’s used
another way options are used in real
estate which I use quite often is let’s
say I go up to a project and they say
we’re going to break ground in one year
on this apartment condominium project
and you can buy a condominium right now
before it’s even built so it’s called a
pre-construction purchase it’s also
called buying off the plants in other
words and I don’t recommend this
wholeheartedly but off the plans means
the building’s not even built yet but
you go up to the developer because they
have to sell so many of these projects
they have to sell so many units or get
so many buyers committed to them so
let’s say I give them $1,000 down the
price is $50,000 today and three years
from now when the project is completed
the project’s worth $150,000 at that
point I don’t have to buy the project I
don’t have to finance this hundred
$50,000
what I can do is just basically sell my
position my option to somebody else for
the hundred thousand dollars and they
can buy the property also so I do all I
do all these types of options and real
estates and even at right now I’m buying
six units off the plans the buildings
aren’t even built yet but I’m putting an
option down in three years hopefully
into skull speculation not investing
because then speckling the price will go
up the option just assures me that’s a
certain price today and I’m hope I’m
betting that the price will be higher in
the future so these are the types of
ways options are used in real estate
also as an additional point I’d like to
add that when you find in your area in
identifying pieces of real estate this
is where your broker becomes very
important not all brokers are equal not
all brokers are the same intelligence as
you’re going through the area and
looking at different properties you’ll
soon find out the brokers you like and
brokers who like you right right and
then also not all brokers work with
investors most of them work with home
buyers especially the first time you
know so there’s you know the kitchen is
important you know how pretty is the
paint and all that what we don’t care
about that so on top of finding the
right broker yet the find one that
understands you and hopefully is an
investor himself or herself right most
brokers that understand you that have
the same mentality our investors and
don’t ever be put off by a broker who is
an investor don’t think well if there’s
any good deal that comes along he’ll
take it for himself
no broker can buy every deal that comes
across as desk yeah the advantage of a
broker that does invest as he
understands the mentality understands
what we’re after that we don’t care
whether the deli on the corner is good
or not
we just want a good deal yeah investors
think different than homebuyers real
estate agents focus on the house and not
the market so what I’m watching for or
listening for hoping to hear is we I
have a real estate broker who is the
same thing with me is it looking at the
area first the property second exactly
and when you find a good broker pay them
well I meet so many people who will tip
their waiter 20% but try and stuff the
broker 6% or whatever the Commission is
you know that’s tipping somebody who’s
costing you money rather than tipping of
somebody who can make your
I like to pay my brokers everything I
mean I like making them rich because
they making me rich to what I do what
real estate guys do is opposite of what
stock and currency guys do right so I
don’t save money you know I used it
right and in 2007 when the US market
went down with the real estate market my
partners and I borrowed a half a billion
dollars not ran dollars right and we
bought the best real estate possible and
it was wonderful and then what happened
in a few few months ago 2014-2015 they
also re will refinance from five percent
to two and a half percent well so
imagine our debt service going down by
50 percent
it’s our cash flow went up now when I
talk to the average person I don’t care
if there are PhD in economics I really
don’t understand what I’m saying
there so how can you make money off of
debt absolutely and the reason is is
because that’s what the rich really do
is they use debt and taxes to get rich
and the poor the middle class debt in
taxes makes it poor how accessible
really is real estate investing to the
average Joe investor that wants to get
away from the mainstream it’s always the
same thing is that real estate is the
best investment of all there’s two
reasons why Real Estate’s the best
investment time-honoured which you’re
going to be smart at it then the number
one reason for real estate is debt you
know who else is going to give you money
to buy you know they don’t give you
money to start a business so they don’t
give you money to invest in oil but they
give you money to buy real estate so
debt is the key so as I covered my book
second-chance debt makes the rich richer
and secondly taxes make the rich richer
so when I buy real estate is the last
investment where I can make millions of
dollars and pay zero tax legally so the
irony of it is these guys who are
investing in the stock market
they don’t really have any advantages
for debt there’s some little bit and
they have no real tax advantages that’s
stupid
so I don’t care what you say about good
markets or bad markets good real estate
bad real estate real estate is the last
great investment number one for debt
number two for taxes thank you so much
for watching continue to believe and
I’ll see you soon
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