Excerpt from Rich Dad's Guide to Investing by Robert Kiyosaki, Sharon L. Lechter, plus links to reviews, author biography & more

In 1973, I barely had $3,000 to invest and I did not have much education and real-life experience. By 1994, I had become a sophisticated investor.

Over 20 years ago, rich dad said, "Just as there are houses for the rich, the poor, and the middle class, there are investments for each of them. If you want to invest in investments that the rich invest in, you have to be more than rich. You need to become a sophisticated investor, not just a rich person who invests."

The Five Phases of Becoming a Sophisticated Investor

Rich dad broke my development program into five distinct phases, which I have organized into phases, lessons, and chapters. The phases are:

1. Are You Mentally Prepared to Be an Investor?

2. What Type of Investor Do You Want to Become?

3. How Do You Build a Strong Business?

4. Who Is the Sophisticated Investor?

5. Giving It Back.

This book is written as a guide. It will not give you specific answers. The purpose of this book is to help you understand what questions to ask. And if this book does that, it has done its job. Rich dad said, "You cannot teach someone to be a sophisticated investor. But a person can learn to become a sophisticated investor. It’s like learning to ride a bicycle. I cannot teach you to ride a bicycle, but you can learn to ride a bicycle. Learning to ride a bicycle requires risk, trial and error, and proper guidance. The same is true with investing. If you do not want to take risks, then you’re saying you do not want to learn. And if you do not want to learn, then I cannot teach you."


If you’re looking for a book on hot investment tips, or how to get rich quick, or the secret investment formula of the rich, this book is not for you. This book is really about learning more than investing. It is written for people who are students of investing, students who seek their own path to wealth rather than look for the easy road to wealth.

This book is about rich dad’s five phases of development, the five phases that he went through and that I am currently going through. If you are a student of great wealth, you may notice while reading this book that rich dad’s five phases are the same five phases that the richest business people and investors in the world went through in order to become very, very rich. Bill Gates, founder of Microsoft; Warren Buffet, America’s richest investor; and Thomas Edison, founder of General Electric, all went through these five phases. They are the same five phases that the young new millionaires and billionaires of the Internet or the "dot com" generation are currently going through while still in their twenties and thirties. The only difference is that because of the Information Age, these young people went through the same phases faster...and maybe so can you.

Are You Part of the Revolution?

Great wealth, vast fortunes, and mega-rich families were created during the Industrial Revolution. The same is going on today during the Information Revolution.

I find it interesting that today we have self-made multi-millionaires and billionaires who are twenty, thirty, and forty years of age; yet we still have people forty and over having a tough time hanging on to $50,000-a-year job’s. One reason causing this great disparity is the shift from the Industrial Age to the Information Age. When we shifted into the Industrial Age, people like Henry Ford and Thomas Edison became billionaires. Today, shifting into the Information Age, we have Bill Gates, Michael Dell, and the founders of the Internet companies becoming young millionaires and billionaires. These twenty-somethings will soon be passing Bill Gates–who is old at 39–in wealth. That is the power of a shift in ages, the shift from the Industrial Age to the Information Age. It has been said that there is nothing so powerful as an idea whose time has come...and there is nothing so detrimental than someone who is still thinking old ideas.

Copyright © 2000 by Robert T. Kiyosaki and Sharon L. Lechter