Kiyosaki mentioned that there are different types of investors. When we classify these investors into ranks, then the ultimate investor would be on the top. Ultimate investors are business persons who have their own companies listed in stock exchange.

According to Kiyosaki, ultimate investors create assets where there were none; they make money out of nothing. The ultimate investor spurs the economy in the community where his or her business exists through job creation. Ultimate investors still control their companies though they’ve sold pieces of them, and down the road if they need capital to expand operations, they can sell more shares. This privileged position puts ultimate investors in the company of those elite who are invited to invest in promising companies before they go public. When these companies finally do go public, the ultimate investors are in the advantageous position of being selling shareholders.

Rich Dad Tips:

“The rich invent their own money. How? They build companies and sell their shares in public.”

“Poor is eternal, but broke is temporary. If you lose everything and yet you’re financially literate, you’ll be able to build it again.”

Here in the Philippines, ultimate investors are people in the likes of Henry Sy, owning shares of his listed companies SM Holdings, Banco De Oro (BDO) and SM Prime Holdings; Jaime Augusto Zobel de Ayala, owning shares of his companies that includes Ayala Corp., Ayala Land, and Bank of the Philippine Islands (BPI); John Gokongwei owning shares of his JG Summit Holdings, and Tony Tan Caktiong, owning shares of his fastfood chain Jollibee Foods Corp.

How Can You Become an Ultimate Investor?

If you are already a business owner, Kiyosaki had a series of questions for you to answer and ponder:

• Is it profitable?
• Do I still enjoy running it, or am I restless?
• Have operations grown too rapidly for me to keep up, or too complex for my level of management skill?
• Is the business going to require a lot of capital funding in the future?
• Is the industry expanding or contracting?
• Am I ready to start another business?
• Do I really want to retire?
• Can I afford to pass the business on to children or other family members?
• Are my heirs capable of managing the operation?
• Public offerings are expensive—can my company afford one?

Rich Dad Tip:

“When companies go public, ultimate investors don’t buy shares. They sell them.”

If your answers reveal that you’re at a crossroads rather than the finish line, you may be ready to choose the path of the ultimate investor.

Do you want to take your company public? Then Kiyosaki said to bear in mind the following:

Get a mentor. This person should not just train you but also introduce you to elite investor circles. There will always be someone who knows more than you do—search high and low for that special person who will guide you in the ways of your chosen industry. Be ready to devote a few years to the process, for experience is a crucial part of the ultimate investor curriculum.

Learn about IPOs. The key to getting rich through an IPO is being able to predict what the market will want in three to five years, which is how long it may take to bring a company to the public. This requires in-depth knowledge of national or global market trends, as well as intuition.

Hone your sales skills. To raise capital for a business that you wish to take public someday, you’ll have to sell your idea to potential investors. Convincing others that your idea is worth their risk of capital requires self-confidence, honesty, and business acumen. You must be skilled in the art of public speaking, know your subject inside out, and believe in what you’re saying. Most important, you must be able to ask for the check at the end of your sales pitch.

Invest in management, not product. Because there are no earnings by which to gauge profitability in start-ups, savvy investors evaluate the management team. Even a surefire product won’t work if it’s mishandled by the management team. Make sure your management team includes someone experienced in going public.

Understand the industry. When you start a company, particularly one you intend to trade publicly, you’re dealing with a myriad of unknowns. At the very least, you should familiarize yourself with your industry, everything from competitive pricing to the latest government regulations affecting it.

Keep your focus on the core business. Many companies lose sight of their core business during the process of going public, and some end up failing because the principals diverted their attention from running the business to the chore of going public.

Look for capital. There are many sources of capital funding. You can issue a private-placement memorandum (PPM) explaining the investment opportunity you’re offering and the terms for participation. A PPM is drawn up by an attorney specializing in securities law and is distributed to targeted investors. You can also approach angels or venture capitalists. They not only fund emerging companies but also often become partners and personal trainers to get the businesses shipshape for an IPO.

Be patient. For a pre-determined time after a company goes public, major shareholders and officers are legally restricted from selling their shares of stock. So even if your company makes a bundle, you must be patient about your equity.

If you make it to the pinnacle of IPOs, you will have joined the world of too much money. The most important thing your money will buy is financial freedom. This doesn’t mean complete freedom from work, however. You’ll still be minding your fortune. The difference is you’ll have an army of talented people to mind the nuts-and-bolts systems of the businesses you’ve built.

Finally, Kiyosaki said to GIVE BACK.

No matter how hard you’ve worked to build your assets, don’t forget to give some of your money back. Bear in mind that philanthropy has practical benefits. It reduces taxable income and is a boon to public relations. Far more important, though, it allows you to experience the ultimate power of money. By giving back to society, you have the power to change society. What’s the good of worldly riches if they leave you poor in spirit? Philanthropy will make you richer in spirit. And it may cause your name to outlive you.

Rich Dad Tip:

 “If, as you travel the path toward financial freedom, you give back to the community, when you finally reach your goal, you’ll be richer in spirit.”

Lastly, Kiyosaki challenged us to THINK BIG.

The reason most people stop and turn back from their dreams is that the tiny person inside them beats the person who is bigger. Work daily to be bigger than your smallness. Even though you still may not be good at everything, if you keep on striving, your world will change. Never run from what you need to learn. Face your ignorance, your fears, and your doubts. Make mistakes, and then learn from them.

Source: Robert Kiyosaki’s Coaching Program

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