You mean that is the least someone can invest in this deal?" Rich dad nodded. "How much does the government pay you as a Marine Corps pilot?" "I was earning about $12,000 a year with flight pay and combat pay in Vietnam. I really don't know what my pay will be here now that I am stationed in Hawaii. I might get some COLA, cost of living allowance, but it sure isn't going to be much, and it certainly will not cover the cost of living in Hawaii." "So for you to have saved $3,000 was quite an accomplish- ment," said rich dad, doing his best to cheer me up. "You saved nearly 25% of your gross income." I nodded yet silently I realized how very, very far behind I was from becoming a so-called accredited investor. I realized that even if I became a General in the Marine Corps, I would probably not earn enough money to be considered an accred- ited investor. Not even the president of the United States, un- less he or she were already rich, could qualify on salary alone. "So what should I do?" I finally asked. "Why can't I just give you my $3,000 and you combine it with your money and we split the profits when the deal pays off?" 28 Rich Dad's Guide to Investing "We could do that," said rich dad. "But I wouldn't recom- mend it. Not for you anyway." "Why?" I asked. "Why not for me?" "You already have a pretty good financial education foun- dation. So you can go way beyond just being an accredited in- vestor. If you want, you could become a sophisticated investor. Then you will find wealth far beyond your wildest dreams." "Accredited investor? Sophisticated investor? What's the difference?" I asked, actually feeling a spark of renewed hope. "Good question," Mike said with a smile, sensing that his friend was coming out of a slump. "An accredited investor is by definition someone who qual- ifies because he or she has money. That is why an accredited investor is often called a qualified investor," rich dad ex- plained. "But money alone does not qualify you to be a so- phisticated investor." "What is the difference?" I asked. "Well, did you see the headlines in yesterday's newspaper about the Hollywood movie star who lost millions in an in- vestment scam?" asked rich dad. I nodded my head saying, "Yes I did. Not only did he lose millions, he had to pay the tax department for untaxed in- come that went into that deal." "Well, that is an example of an accredited or qualified in- vestor," rich dad continued. "But just because you have money does not mean you're a sophisticated investor. This is why we often hear of so many high-income people such as doctors, lawyers, rock stars, and professional athletes losing money in less-than-sound investments. They have the money but they lack the sophistication. They have money but don't know how to invest it safely and for high returns. All the deals look the same to them. They can't tell a good investment from a bad one.