It was now time for me to decide what I wanted to do for myself. The thought of studying to become a sophis- ticated investor appealed to me. I could continue my educa- tion with rich dad as I gained the experience I needed. This time, my rich dad would be guiding me as an adult. What Should I Invest In? 31 20 Years Later By 1993, rich dad's wealth was split between his children, grandchildren, and their future children. For the next hun- dred years or so, his heirs would not have to worry about money. Mike received the primary assets of the business and has done a magnificent job of growing the balance of rich dad's financial empire, a financial empire that rich dad had built from nothing. I had seen it start and grow during my life- time. It took me 20 years to achieve what I thought I should have been able to do in 10 years. There is some truth to that saying, "It's the first million that is the hardest." In retrospect, making $1 million was not that difficult. It's keeping the million and having it work hard for you that I found to be difficult. Nevertheless, I was able to retire in 1994 at the age of 47, financially free with ample money with which to enjoy life. Yet, it was not retirement that I found exciting. It was fi- nally being able to invest as a sophisticated investor that was exciting. To be able to invest alongside Mike and rich dad was a goal worth achieving. That day back in 1973, when Mike and rich dad said I was not rich enough to invest with them, was a turning point in my life and the day I set the goal to become a sophisticated investor. The following is a list of some of the investments in which so-called 'Accredited Investors and Sophisticated Investors" invest: 1. Private placements 2. Real estate syndication and limited partnerships 3. Pre-initial public offerings (IPOs) 4. IPOs (while available to all investors, IPOs are not usu- ally easily accessible) 5. Sub-prime financing 32 Rich Dad's Guide to Investing 6. Mergers and acquisitions 7. Loans for startups 8. Hedge funds For the average investor, these investments are too risky, not because the investment itself is necessarily risky, but be- cause all too often, the average investor lacks the education, experience, and excessive capital to know what he or she is getting into. I now tend to side with the SEC that it is better to protect unqualified investors by restricting their access to these types of investments because I made some errors and false steps along the way. As a sophisticated investor today, I now invest in such ven- tures. If you know what you're doing, the risk is very low while the potential reward can be huge. Investments such as these are where the rich routinely invest their money. Although I have taken some losses, the returns on the in- vestments that do well have been spectacular, far exceeding the few losses. A 35% return on capital is normal, but returns of 1,000% and more are occasionally achieved.