3 Steps To Create a Winning Investment Plan, According to Robert Kiyosaki

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A recent post on Robert Kiyosaki’s “Rich Dad” blog shared the steps the average person should take to create a winning investment plan. 

The “Rich Dad” personal finance team claimed many Americans have gotten it all wrong when trying to plan for retirement because they’ve focused on saving for their future via 401(k)s or getting a college degree that would land them a solid career and provide a healthy retirement fund. 

Instead, Kiyosaki’s team suggested that learning how to invest on your own is the way to get ahead financially. 

Here are the steps to take to create your own winning investment plan, inspired by personal finance expert Robert Kiyosaki. 

Determine How Much You Can Invest

Kiyosaki’s team wrote that if you don’t think you have the money to invest, you should consider how you are managing your current finances. Prioritize any funds used for nonessential spending toward your investing goals.

Additionally, the team pointed out that you don’t always need to use your own money for investments. Learning how to leverage other people’s money can open up new opportunities.

“Investing with ‘other people’s money’ (OPM) refers to leveraging borrowed funds or capital from other sources to make investments,” explained Dennis Shirshikov, head of growth at Summer and a finance professor at the City University of New York. “This can include taking out loans, using margin accounts or attracting investors to fund ventures. The key advantage of using OPM is the ability to amplify potential returns without needing to have all the capital up front.”

However, Shirshikov said it’s crucial to manage risks carefully, because leveraging OPM also means increased financial obligations and the potential for greater losses.

Find Out What You Want To Invest In

According to the “Rich Dad” personal finance team, the variety of investment options available can be overwhelming, which leads many to stick with familiar choices such as 401(k)s or the stock market. However, they pointed out that there are many other opportunities available, including the following five main asset classes.

Paper Assets

Paper assets include stocks, bonds, mutual funds and retirement accounts. They also cover real estate investment trusts and exchange-traded funds.

Real Estate

Investments in this category can provide rental income or capital gains from property sales.

Commodities

Commodities include raw materials such as metals (gold, silver), food (grains, coffee) and energy resources (oil, gas). The post pointed out that investing in commodities is generally a capital gains or loss investment, and you can purchase future contracts of any commodity via the future exchanges.

Business

You can invest in starting your own business or in someone else’s private company. The goal is to generate returns for yourself, the business and any investors. 

Cryptocurrency

Digital currencies such as Bitcoin and Ethereum offer potential for high returns but require careful navigation due to their volatility, the “Rich Dad” personal finance team cautioned.

If you’re intimidated by investing, Shirshikov said, it’s wise to avoid high-volatility asset classes such as individual stocks, options and cryptocurrencies. He explained that these investments can experience significant price swings, which might be overwhelming for new investors and lead to hasty, emotion-driven decisions.

Instead, Shirshikov suggested that beginners consider more stable and diversified asset classes such as mutual funds, exchange-traded funds and bonds. 

“These investments spread risk across multiple assets, providing a more balanced and less volatile investment experience,” he said. “For example, an S&P 500 ETF offers exposure to 500 of the largest U.S. companies, reducing the risk associated with investing in a single stock. Additionally, bonds provide steady income and are generally less risky than stocks, making them suitable for risk-averse investors.”

Make Long-Term Goals

Once you know your budget and preferred investments, the “Rich Dad” personal finance team said, you should set long-term goals. They recommended writing down your goals and reviewing them regularly. An example they gave was that if you invest in residential real estate, you should aim to purchase one rental property in your first year, two in the second year and possibly a small apartment building by the fifth year. 

No matter what you choose to invest in, the team recommended planning for growth over the long term and staying committed to your goals. 

Shirshikov gave the following examples of long-term goals related to investing: 

Retirement Savings

“Building a substantial nest egg to ensure a comfortable retirement is one of the most common long-term investment goals,” he said. “This involves consistent contributions to retirement accounts like 401(k)s or IRAs, taking advantage of compound interest over time.”

Buying a Home

“Accumulating funds for a down payment on a house can be a long-term goal that requires disciplined saving and investing,” Shirshikov said. “Investments for this goal might be allocated in low to moderate risk assets to preserve capital while achieving growth.”

Education Funding

Shirshikov added that saving for a child’s college education is another long-term goal that often requires starting early to take advantage of growth through education savings plans.

Wealth Building

“General wealth accumulation to achieve financial independence or leave a legacy can also be a long-term goal,” Shirshikov said. “This might involve a diversified portfolio aimed at maximizing returns over decades.”

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