Page 116 - Why We Want You To Be Rich - Donald Trump, Robert Kiyosaki.pdf

110 I CHAPTER EIGHT

Diversify, Diversify, Diversify

Warren Buffett, reportedly the world's richest investor, has this to say
about diversification: "Diversification is protection against ignorance. (It)
makes very little sense ifyou know what you are doing."
So the question is, whose ignorance are you protecting yourself from?
Your ignorance or your financial advisor 's ignorance?
Again, there are multiple meanings for the world "diversify."Generally,
it means not putting all ofyour eggs in one basket, which is what Warren
Buffett does. To this, I once heard him say, "Keep allyour eggs in one basket,
but watch the basket closely."
Personally, I do not diversify, at least not in the way the financial
planners recommend. I do not buy a lot ofdifferent assets. I would rather
focus. In fact, the way I get ahead is by focusing, not diversifying.
One ofthe better definitions I have heard for the word "focus" is using
the word as an acronym.

F =Follow
0 =One
C =Course
U =Until
S =Successful

This is what I have done. Years ago, I invested in real estate until I was
successful. Today, I still invest in real estate. When I wanted to learn about
bonds, I invested in them until I was successful. Once I was successful, I
decided I did not like bonds and so do not invest in them anymore. I have
successfully taken two companies from startups through to IPOs (Initial
Public Offerings). I made millions and was successful, but decided I did not
want to go through that process anymore. Today, I still prefer real estate.
To me, diversification is a defensive posture, so I see very little offensive
leverage in diversification.
For most people, diversification is a good strategy only because it
protects investors from themselves and from incompetent or unscrupulous
advisors.

WHY WE WANT You To BE RICH
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