I’m a huge fan of Ray Dali’s work. He put together a beautiful way to easily understand how our economics work. This summarizes so much what I’ve learned, over a long time, in such a short and succinct manner. A must view.

A few people have started sending me questions. I thought it may be best to share my responses with everyone. If you have any of your own questions, feel free to post them in the comments, and I promise to reply.

“What are your favorite 2–3 instructional books or resources on real estate investing? If someone had to teach himself, what would you suggest they use?”

1 — rich dad poor dad — kiyosaki
2 — cashflow quadrants — kiyosaki
3 — millionaire real estate investor — by gary keller

What are the biggest wastes of time when someone is starting out? …

When we invest, if we’re always required to put and keep our capital in the deal, it can become difficult to grow our wealth quickly. Simply because, you’ll always be constraint by how much capital you have to grow.

Invest $100 into a deal, and have it be worth $200, there was a gain of 100%.

Invest $0 into a deal, and have it be worth $200, there was a gain of infinite returns.

How is this possible? I’ll explain shortly.

If you were able to get infinite returns, how many deals could you do?

As many as you’d have time to do. You could do many infinite deals, because you wouldn’t be constrained by having to have more capital to invest each time. You’d be able to keep investing, over and over again. If after every deal you did, you still had the same cash as you had before, you could go on forever. …

Diversifying your investments has pros and cons. It’s fairly clear, most everyone understands the pros, and why you do it. Most financial planners will generally say… diversify, diversify, diversify, but generally speaking, they’re not rich, because wide diversification usually doesn’t make people rich. If you want to get rich, take the advice from rich people.

More often than not, most rich people generally made their money through a very concentrated ownership of a few things at most, and they would double down on what worked. This is true for both investors, and entrepreneurs, as entrepreneurs create their own stock, make it valuable, and then sell it to the public. …

As time progress, asset values continue increase or decrease, and new cash, for future investments is continually added to your portfolio. It’s a good idea to consider rebalancing your portfolio, changing your asset allocation if necessary.

Let’s use the stock market, and a stock brokerage account for example. Consider the difference between brokerage accounts that hold the following.

100% invested into stocks, 0% cash

75% stocks, 25% cash

50% stocks, 50% cash

25% stocks, 75% cash

0% stocks, 100% cash.

When there has been a bear market for an extended period of time, the market is low, the stock prices are cheaper, and thus generally, less risky, as there is more potentially to gain. You may consider going more aggressively into the market, and allocating your portfolio, 75% into stocks, and holding 25% in cash. …

You’ve heard the saying, “Cash is King.”

I want you to consider that “Cashflow is King.”

First, let me acknowledge cash. The term cash is king, obviously is still incredibly important. You want to have cash. You want to be able to do deals, and purchase them with cash if you so choose. You want to have the security, and the options to make deals or do things at any time. But case in of itself, is just the future possibility of spending or investing your money at a later time.

The problem with cash, is it gets easily spent over time. Take for example, the startups that raise millions of dollars, yet have cash flow. Sure they have a boat load of cash, and the possibility of making money in the future, but they aren’t making any money and are in many ways worthless. They won’t be worth much in the future, unless they acutally have cashflow. And yes, these companies could be acquired, for billions of dollars, without ever being cashflow positive, but some day, eventaully they must be cashflow positive, or else they will go out of business and are in fact worth noting. …

One way to be more focused, is to remove distractions.

For Mac users, the simplest and most effective way to do this, is by enabling the “Do Not Disturb” feature, and hide your dock.

Using these 2 features, you will have a fully focused productive work space. You won’t have any notifications occuring, and you won’t have any red badge notifications appearing in your dock. Which happens every time someone messages you.

The latest MacBook Pro updates make this even easier to achieve with their touchbar. You can add a “Do Not Disturb” button right to your keyboard.

Instantly turn this on, and start your productive, distraction free day.

Enjoy.

PS: This only really works great if you don’t have to speak to anyone for awhile.

Unrealized gains are one of the most powerful tools in becoming rich, and it is one of the reason why some some never pay any taxes. It’s the reason that some investors, can continually compound all of the money they have invested, unlike most, who pay taxes and start the next year with less, only to have to gain to get back where that left off before paying taxes. …