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The Ultimate Investor
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The ultimate investor is a person such as Bill Gates or Warren Buffet. These investors build giant companies that other investors want to invest in. The ultimate investor is a person who creates an asset that becomes so valuable that the asset they created is worth literally billions of dollars to millions of people.

Both Gates and Buffet became rich not because of their high salaries or their great products but because they built great companies and took the companies public.

While it is not likely that many of us will ever build a Microsoft or Berkshire Hathaway, we all have the possibility of building a smaller business and becoming wealthy by selling it privately or selling it publicly.

Rich dad used to say, “Some people build houses to sell; others build cars, but the ultimate is to build a business that millions of people want to own a share of. ”

The Investor Controls Possessed by the Ultimate Investor

1. The control over yourself

2. The control over income/expense and asset/liability ratios

3. The control over the management of the investment

4. The control over taxes

5. The control over when you buy and when you sell

6. The control over brokerage transactions

7. The control over the E-T-C (entity, timing, characteristic)

8. The control over the terms and conditions of the agreements

9. The control over access to information

10. The control over giving it back, philanthropy, redistribution of wealth

1. Education

2. Experience

3. Excessive cash

Sharon's Notes

There are advantages and disadvantages of “going public, ” which we will discuss in greater detail later. However , here are a few of the advantages and disadvantages of an initial public offering (IPO) :

Advantages:

1. To allow business owners to “cash in” some of their equity in the business. For example, Gates's original partner, Paul Allen, sold some of his Microsoft shares in order to buy cable TV companies.

2. To raise expansion capital.

3. To pay off company debt.

4. To raise the company's net worth.

5. To allow the company to offer stock options as benefits to its employees.

Disadvantages:

1. Your operations become public. You are forced to disclose

information to the public that had previously been private.

2. The IPO is very expensive.

3. Your focus is diverted from running the operations of the business to facilitating and meeting the requirements of being a public company. 4. Compliance with the IPO and ongoing quarterly and annual

reporting requirements are extensive.

5. You risk losing control of your company.

6. If your stock does not perform well in the public market, you risk

being sued by your shareholders.

For many investors the potential financial reward of taking their company public greatly overshadows any potential disadvantage of an IPO .

Starting on My Path

The rest of this book is about rich dad guiding me as an inside investor and ophisticated investor on my path to becoming the ultimate investor . He no longer had to guide his son Mike. Mike was content being an inside investor. You will gain some insights into what rich dad thought was important, what I needed to learn, and some of the mistakes I made along the way. It is my hope that you can learn from my successes as well as my mistakes on your own path to becoming the ultimate investor .

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