Page 163 - Why We Want You To Be Rich - Donald Trump, Robert Kiyosaki.pdf

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r .. GETIING VERY RICH Is PREDICTABLE ••• NOT RISKY I 157
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is true. Bringing prices down is the object of competitive capitalism.
Without competitive capitalism, we would not enjoy a higher standard of
livingat an affordable price.
My point is, once you understand predictability, you will see it
everywhere. You can see it every time you pass a McDonald's. You can see
predictability every time you see a pair of Levi's jeans. When you drive up
to a gas station to fillyour car with gas, it ispredictability in action. Yousee
it even playing Monopoly. Ifyou recall, one house pays you so much. Ifyou
add two houses, you earn more, and ifyou convert four houses into a red
hotel, you earn even more. Once you understand predictability,you will see
it everywhere.And wherever you seepredictability, you will understand why
someone or some business is making a lot ofmoney without much risk.
Now you may better understand why I become frustrated when I hear
people say, "Investing is so risky." Or when I hear a financial planner tell
someone that the safe thing to do is invest in savings and mutual funds. To
me,it just shows a lack offinancial training and a low financial IQ.
Donald Trump makes his billions not by building just one building; he
builds many buildings or he builds a building with hundreds of
condominiums in it and sellsthem. His formula for successfits the formula
Ijust described. He leverages,controls, creates, expands and predicts.While
there is alwayssome risk, he has confidence in his projects because he is in
control ofthe process.
When I invest, I go through the same process. For example, when I buy
a build ing, I am confident that I will receive the following four types of
income:

1. Rental income
2. Depreciation income (a.k.a. phantom cash flow)
3. Amortization (my tenant pays offmy loan)
4. Appreciation (the dollar is dropping in value)

I put appreciation last because it is the least important ofall the incomes.
Yet, for most investors, appreciation (capital gains) is the only income they
are going after when they invest. For example, when someone buys a stock

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