All brokers are not created equal。 Unfortunately； most brokers are only salespeople。 I would say the real estate salespeople are the worst。
They sell； but they themselves own little or no real estate。 There is a tremendous difference between a broker who sells houses and a broker who sells investments。 And that is true for stock； bond； mutual fund and insurance brokers who call themselves financial planners。 As in the fairy tale； you kiss a lot of frogs to find one prince。 Just remember the old saying； 〃Never ask an encyclopedia salesperson if you need an encyclopedia。〃
When I interview any paid professional； I first find out how much property or stocks they personally own and what percentage they pay in taxes。 And that applies to my tax attorney as well as my accountant。 I have an accountant who minds her own business。 Her profession is accounting； but her business is real estate。 I used to have an accountant that was a small business accountant； but he had no real estate。 I switched because we did not love the same business。
Find a broker who has your best interests at heart。 Many brokers will 。'； spend the time educating you； and they could be the best asset you find。 Just be fair； and most of them will be fair to you。 If all you can think about is cutting their missions； then why should they want to be around you？ It's just simple logic。
As I said earlier； one of the management skills is the management of people。 Many people only manage people they feel smarter than and they have power over； such as subordinates in a work situation。 Many middle managers remain middle managers； failing to get promoted because they know how to work with people below them； but not with people above them。 The real skill is to manage and pay well the people who are smarter than you in some technical area。 That is why panies have a board of directors。 You should have one； too。 And that is financial intelligence。
7。 BE AN 〃INDIAN GIVER〃： This is the power of getting something for nothing。 When the first white settlers came to America； they were taken aback by a cultural practice some American Indians had。 For example； if a settler was cold； the Indian would give the person a blanket。 Mistaking it for a gift； the settler was often offended when the Indian asked for it back。
The Indians also got upset when they realized the settlers did not want to give it back。 That is where the term 〃Indian giver〃 came from。 A simple cultural misunderstanding。
In the world of the 〃asset column；〃 being an Indian giver is vital to wealth。 The sophisticated investor's first question is； 〃How fast do I get my money back？〃 They also want to know what they get for free； also called a piece of the action。 That is why the ROI； or return of and on investment； is so important。
For example； I found a small condominium； a few blocks from where I live； that was in foreclosure。 The bank wanted 60；000； and I submitted a bid for 50；000； which they took； simply because； along with my bid； was a cashier's check for 50；000。 They realized I was serious。 Most investors would say； aren't you tying up a lot of cash？ Would it not be better to get a loan on it？ The answer is； not in this case。 My investment pany uses this as a vacation rental in the winter months； when the 〃snowbirds〃 e to Arizona； and rent it for 2；500 a month for four months out of the year。 For rental during the off…season； it rents for only 1；000 a month。 I had my money back in about three years。 Now I own this asset； which pumps money out for me； month in and month out。
The same is done y broker will call me and remend I move a sizable amount of money into the stock of a pany that he feels is just about to make a move that will add value to the stock； like announcing a new product。 I will move my money in for a week to a month while the stock moves up。 Then； I pull my initial dollar amount out； and stop worrying about the fluctuations of the market； because my initial money is back and ready to work on another asset。 So my money goes in； and then it es out； and I own an asset that was technically free。
True； I have lost money on many occasions。 But I only play with money I can afford to lose。 I would say； on an average ten investments； I hit home runs on two or three； while five or six do nothing； and I lose on two or three。 But I limit my losses to only the money I have in at that time。
For people who hate risk； they put their money in the bank。 And in the long run； savings are better than no savings。 But it takes a long time to get your money back and； in most instances； you don't get anything for free with it。 They used to hand out toasters； but they rarely do that these days。
On every one of my investments； there must be an upside； something for free。 A condominium； a mini…storage； a piece of free land； a house； stock shares； office building。 And there must be limited risk； or a low…risk idea。 There are books devoted entirely to this subject that I will not get into here。 Ray Kroc； of McDonald's fame； sold hamburger franchises； not because he loved hamburgers； but because he wanted the real estate ； under the franchise for free。
So wise investors must look at more than ROI； it's the assets you get for free once you get your money back。 That is financial intelligence。 ：
8。 ASSETS BUY LUXURIES： The power of focus。 A friend's child has been developing a nasty habit of burning a hole in his pocket。 Just 16； he naturally wanted his own car。 The excuse； 〃All his friends' parents gave their kids cars。〃 The child wanted to go into｜
his savings and use it for a down payment。 That was when his father called me。 〃Do you think I should let him do it； or should I just do as other parents do and just buy him a car？〃
To which I answered。 〃It might relieve the pressure in the short term； but what have you taught him in the long term？ Can you use this desire to own a car and inspire your son to learn something？〃 Suddenly the lights went on； and he hurried home。
Two months later I ran into my friend again。 〃Does your son have his new car？〃 I asked。
〃No； he doesn't。 But I went and handed him 3；000 for the car。 I told him to use my money instead of his college money。〃 〃Well； that's generous of you；〃 I said。
〃Not really。 The money came with a hitch。 I took your advice of using his strong desire to buy a car and use that energy so he could learn something。〃
〃So what was the hitch？〃 I asked。
〃Well； first we broke out your game again； CASHFLOW。 We played it and had a long discussion about the wise use of money。 I then gave him a subscription to the Wall Street Journal； and a few books on the stock market。〃
〃Then what？〃 I asked。 〃What was the catch？〃
〃I told him the 3；000 was his； but he could not directly buy a car with it。 He could use it to buy and sell stocks； find his own stockbroker； and once he had made 6；000 with the 3；000； the money would be his for the car； and the 3；000 would go into his college fund。〃
〃And what are the results？〃 I asked。
〃Well； he got lucky early in his trading； but lost all he gained a few days later。 Then； he really got interested。 Today； I would say he is down 2；000； but his interest is up。 He has read all the books I bought him and he's gone to the library to get more。 He reads the Wall Street Journal voraciously； watching for indicators； and he watches CNBC instead of MTV。 He's got only 1；000 left； but his interest and learning are sky high。 He knows that if he loses that money； he walks for two more years。 But he does not seem to care。 He even seems uninterested in getting a car because he's found a game that is more fun。〃
〃What happens if he loses all the money？〃 I asked。
〃We'll cross that bridge when we get to it。 I'd rather have him lose everything now rather than wait till he's our age to risk losing everything。 And besides； that is the best 3；000 I've ever spent on his education。 What he is learning will serve him for life； and he seems to have gained a new respect for the power of money。 I think he's stopped the burning of holes in his pockets。〃
As I said in the section 〃Pay Yourself First；〃 if a person cannot master the power of self…discipline； it is best not to try to get rich。 For while the process of developing cash flow from an asset column in theory is easy； it is the mental fortitude of directing money that is hard。 Due to external temptations； it is much easier in today's consumer world to simply blow it out the expense column。 Because of weak mental fortitude； that money flows into the paths of least resistance。 That is the cause of poverty and financial struggle。
I gave this numerical example of financial intelligence； in this case the ability to direct money to make more money。
If we gave 100 people 10；000 at the start of the year； I gave my opinion that at the end of the year：
80 would have nothing left。 In fact； many would have created I greater debt by making a down payment on a new car； refrigerator； TV； VCR or a holiday。 16 would have increased that 10；000 by 5 percent to 10 percent。 4 would have increased it to 20；000 or into the millions。
We go to school to learn a profession so we can work for money。 It is my opinion that it is also important to learn how to have money work for you。
I love my luxuries as much as anyone else。 The difference is； some people buy their luxuries on credit。 It's the keep…up…with…the…Joneses trap。 When I wanted to buy a Porsche； the easy road would have been to call my banker and get a loan。 Instead of choosing to focus in the liability column； I chose to focus in the asset column。
As a habit； I used my desire to consume to inspire and motivate my financial genius to invest。
Too often today； we focus to borrowing money to get the things we want instead of focusing on creating money。 One is easier in the short term； but harder in the long term。 It's a bad habit that we as individuals and as a nation have gotten into。 Remember； the easy road often bees hard； and the hard road often bees easy。
The earlier you can train yourself and those you love to be masters of money； the better。 Money is a powerful force。 Unfortunately； people use the power of money against them。 If your financial intelligence is low； money will run all over you。 It will be smarter than you。 If money is smarter than you； you w