![]() ![]() But if you bought Apple stock, you'd actually be a partial owner. So if you bought an Apple bond, you wouldn't own any part of Apple. When you purchase a stock you purchase part ownership in a company. I like to invest in stocks, which are called equities. The other problem is you never actually own anything. They pay you a very small interest rate on the money you loaned them. And the problem with a bond is they don't pay very much. Bond vs StocksĪnd to do that, we're going to talk about several different types of paper very quickly. As I show you this trade, you’ll also see the difference between, investing in a 401k and investing like Warren Buffett. I'm going to show you how to get some cash flow. I’m going to show you one of my favorite trades. And I'm going to give you some knowledge to move you to the B and I quadrants. Today, I’m going to show you some wonderful ideas that were never taught to me in school… ever. There is one thing that gets you from being an E or S to becoming a B or I. The mission, in my words, is to help those in the E (employment) and S (small business) quadrant to the B (big business) and I (Investor) quadrant. Why? Because the mission of Rich Dad – to elevate the financial well-being of humanity – is really found in the I-quadrant. Robert always talks about the CASHFLOW Quadrant. The purpose of this blog post is to show you how to cash flow stocks. I want you to learn how to take care of yourself and your family. We need to stop passing that job on to strangers. We need to take responsibility for ourselves. Or what if I sold out and started only recommending stocks that paid me to make recommendations? You would be in trouble. What if I got hurt? Then you’d be in trouble. And if I said, “Hey, just go out and buy some gold,” and you did it. What would happen if I told you to go out and buy a stock for IBM and you did? You wouldn't learn anything. I’m the guy that shows you how to trade with stocks, not what stocks to trade. Understand, first and foremost, that I am not your stock picker. Before I do, it is absolutely essential that I protect you and I protect me. I'm going to take a risk with this blog post and show you some real stock trading and paper asset examples. I’ve asked Andy Tanner, my Rich Dad Advisor on stocks, to step in and explain the exciting strategy he uses to first, investing for cash flow and second, realizing a capital gain using the stock market. That is how you cash flow through the stock market. ![]() If you purchase a stock that pays a dividend, then, as long as you own that stock, it will generate money to you in the form of a dividend. If you bought it at a good price and manage the property well, you will receive a profit, or positive cash flow. Every month you collect the rent and pay the expenses, including the mortgage. To cash flow in real estate, you could purchase a single-family house and, instead of fixing it up and selling it, you rent it out. Cash-flow investors, unlike capital-gains investors, typically do not want to sell their investments because they want to keep collecting the regular cash flow income. Do you really want that gamble?Ĭash flow is realized when you purchase an investment and hold on to it, and every month, quarter, or year that investment returns money to you. But when the markets turn down and prices fall - something nobody can predict - capital-gains investors lose. ![]() As long as market prices go up, capital-gains investors win. These investors are hoping and praying the money will be there when they get out. Most investors today are chasing capital gains in the stock market through stock purchases, mutual funds, and 401(k)s. If you buy a share of stock for $20, and sell it once the stock price increases to $30, that’s also a capital gains profit. The same concept holds true outside of real estate. Of course, there are also capital losses (which occur when you lose money on a sale). Your profit is called “capital gains.” Any time you sell an asset or investment and make money, your profit is capital gains. You make some repairs and improvements to the property, and you sell it for $140,000. In real estate, let’s say you buy a single-family house for $100,000. Essentially, it’s the game of buying and selling for a profit. If you enjoy watching those “fix it up and flip it” TV shows, you’re probably already familiar with the concept of capital gains. Any capital gains are icing on the cake, if they happen at all. Instead of investing for capital gains, the wealthy learn how to invest for cash flow, even in the stock market. Investing for capital gains is akin to gambling, only not as much fun. ![]() Unfortunately, today, many people aren't winning on those bets. Many people invest in the stock market for capital gains, meaning they're betting on the price of something to go up. ![]()
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