After you've made the first million, the next ten million are easy. Let's discuss what makes a successful businessperson and in- vestor a sophisticated investor." Who Is a Sophisticated Investor? "A sophisticated investor is an investor who understands each of the ten investor controls. The sophisticated investor understands and benefits from the advantages of the right side of the Quadrant. Let's go through each investor control so you get a better understanding of how a sophisticated in- vestor thinks," rich dad explained. The Ten Investor Controls 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, characteris- tics) 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, redistri- bution of wealth How a Sophisticated Investor Thinks 379 "It is important to understand that a sophisticated investor may choose not to become an inside investor or ultimate in- vestor; rather, he or she understands the benefits of each con- trol," rich dad continued. "The more controls these investors possess, the less risk they have in the investment." Investor Control # 1: The Control over Yourself "The most important control you must have as an investor is control over yourself." It can determine your success as an investor and is why the entire first phase of the book is dedi- cated to getting control over yourself. Rich dad also often said, "It isn't the investment that is risky, it is the investor who is risky!" Most of us were taught in school to become employees. There was only one right answer, and making mistakes was horrible. We were not taught financial literacy in school. It takes a lot of work and time to change your thinking and to become financially literate. A sophisticated investor knows that there are multiple right answers, that the best learning comes through making mistakes, and that financial literacy is essential to being suc- cessful. They know their own financial statement, and they understand how each financial decision they make will ulti- mately impact their financial statement. To become rich, you must teach yourself to think like a rich person. Investor Control #2: The Control over Income/Expense and Asset/Liability Ratios This control is developed through financial literacy. My rich dad taught me the three cash flow patterns of the poor, 380 Rich Dad's Guide to Investing middle class, and the rich. I decided at an early age that I wanted to have the cash flow pattern of a rich person. The poor spend every penny they make-they have no as- sets and no debt.