Just like others, my mum used to tell me go to college, study hard and then secure a good job in the future. I was bearing in mind that it should be a right thing. When time went on, I found it terrifying to see my observation doesn't really reveal the facts. Is getting a good job guarantee you a good pay? Well, I couldn't argue much to some extent, as I first saw those academic achievers were usually compensated with higher paycheck. However, the minor example like this cannot represent the whole picture. There are success leaders out there earning 6 or more figures income without acquiring any education and some of them even dropped out of high school. Ironically, It has become even more confuse to see the hawkers that fried Kuey Teow in the night market can have as much as five figures per month, while those high academic achievers declare bankruptcy or claim underpaid. Soon I realize it implies the job you hold now doesn't really lead you to wealthy, in fact it is your desire to success, & the willingness to keep trying that will bring you to the final stage you wish to be. Apparently, the old ancient theories inherited from our previous generation definitely have led me to struggle for what should be gone right.
Thanks God I have made up my mind to NAC 2012 to seek out the answers for those questions marks, that have been winding my mind for quite some time. Embraced with the sweet moments and learning-centred environment, lots of rich men's philosophies were being instilled and adopted. Anyhow due to space constraint, I would like to share only on the ultimate theory that originally derived from Kiyosaki. Many people thought that a return of 12% or more generated from their investment are great. In fact, most investors are pursuing for a greater return, irrespective of whether it is in stock market, real estate, futures, and forex. Without wasting much time. I shall bring you to the introduction of infinite return, special dedicated to Robert Kiyosaki, the author of Rich Dad Poor Dad.
As the name suggests, infinite return is a form of return without any limit, which is tremendously large in number. In Rich Dad Unfair Advantage, it refers to the no money down deal, where you generate a return with no downpayment, or likewise you manage to collect your downpayment in weeks, months or years and then repeat go for other profitable deals. Whatever it is, the rule of thumb here is the velocity of money, that require a higher level of financial intelligence to work out in a faster way. The lesser the time you take to collect your money/ downpayment, the successful you are in executing the overall strategy, putting other factors like risk-return trade off as constant.
Having discussion about the theory of infinite return is kinda boring, because people are generally lack of idea about the concept and ways of carrying out the exact planned strategy, or quite often they are uncertain if it can be implemented, which either way it is not meant to be come from my intention to confuse you, as I used to be part of them too in the past.
Lets us have a simple example on executing the infinite return for business return:
Gerald invested a portion of money, approximately RM 100,000 in his ChaTime beverage business, lets assume that Gerald can generate RM 50,000 net profit a year, Gerald will be collected his downpayment in 2 years from now and it has become a no money down. After 2 years, he can use the money (RM100,000) to reinvest in another ChaTime business and enjoy same luxury return. The money keeps growing and after another 2 years (4 years from now), he will be having RM 200,000 to expand its business, and this is the power of infinite return.
(Ps: Doesn't it sound awesome? I have to emphasize that the concept here is generally applicable in massive ways, at the same time I have to clarify that some business risk, like downside of the business, inflation, etc are being neglected for your better understanding.)
Get stumped by the example above? Hope you are not, we shall carry on to the next stage, which requires higher level of financial intelligence.
When we deal in real estate, how are we going to achieve no money down concept for our property investment? Using the same rule of game, first we pay RM 20,000 (10%) downpayment for a property that worth RM 200,000 while get a mortgage loan from bank for the rest of money. After few years, we might refinance the property to get our RM 20,000 back (amount up to the difference between current property value and the principal that has been covered throughout the years) and injecti nto another property thereafter.
Remember: Make money when you are buying property, not when you sell it. You should make sure that you buy a property that under market value for your margin of safety Besides, you can use mark up to get your downpayment money very quickly, if you manage to lock down the under market value deal, and most importantly you are align with your high financial IQ. It is all about your financial education that makes rich people grow richer, which is unlikely to be making money from money invested.
Make money when you are buying property, not when you sell it.~in fact, "Make money when you are buying property" refers to invest for cash flow (where people manage to get cash inflow after deduct all installment and expenses, and it is even good if can get under market value prop to get margin of safety, or mark up if their financial intelligence is perceived to be fairly well)... while "not when you sell it" shows you shdn't buy the property and expect the price of property to go up and sell it for a profit in the future (Inserted on 13/6/12 11.47pm)
Money is just an idea in this new century, this is why we see Mark Zuckerberg, founder of Facebook, Robert Kiyosaki from Rich Dad Company, Steve Jobs from Apple become wealthier attributed to their innovation, as well as their willingness to serve more people in this world.
Last but not least, if you claim that the definition of infinite return might not be exact the same as what you think is right, do forget about it as I am not argue with you what is right and what should be right. It seems pointless to argue it in the other way like from the point of mathematics, infinite return should be the way where we use zero to generate limitless return. (zero is the basis point) Frankly speaking, there might be ways where we create things out of thin air to get value-added for existing products/ business to make an awesome profit, yet I am still not reach that level.
The intention of this sharing is to bombard you with the concept of this creative idea you never thought of in this century, as well as to fully utilize it as an unfair advantage over other people who are unconscious about this simple maths equation.
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