Friday, 6 November 2009

The inside investor:

Robert Kiyosaki stated in his book, “Rich Dad Guide to Investing”, that he “found his financial freedom when he became an inside investor”. According to his definition, an inside investor is someone who is on the inside of the investment and have some control... In other words, inside investors are people who are busy managing their investment rather than buying an investment product managed and controlled by others (i.e. fund managers).

Additionally, inside investors are the early birds in the creating and building of an investment opportunity which eventually grows into a portfolio of solid assets, which subsequently receives other people investments.

Note also, that inside investors have at their finger tips, a team of experts (Lawyers, Accountants, Tax advisors etc); and as existing research findings show, inside investors returns on investment have consistently outperform the returns that they would otherwise get from putting their money into opportunities in general market. Thus, there is a strong case to support the view that an information hierarchy exists, in that, inside investors are usually in pole position to capitalise on off market (or non-public) asset sales.

So, these people are hardly ever interested in acquiring assets that are on the open market or advertised in the papers (FT or Wall Street Journal) etc. Instead, they want to be the first bird that catches the worm. In this way, they can exploit the returns on both investment capital and equity that the worm offers. Hence having access to information first is another way they exert their control. Also, control over their investment is exemplified in another form, in that, their experts provide them with strategic advice that can affect both the size of growth and returns they can achieve on asset purchases. Therefore, being an inside investor helps to reduce risk and accelerate ones wealth quickly, since one is inspired by returns in the region of 50%, 80% or even 200%.

Do you know that a relatively small number of property portfolio builders control nearly $100 trillion in property investments. Thus, it comes as no surprise; therefore, those inside investors have the added advantage of building multiple portfolios, outsourcing management of operations and focus on managing inward cash flows.

What is holding you back from becoming an inside investor?

No comments:

Post a Comment