Let's take stocks, for example. Stocks can be subdivided into: v 1. Common stock 2. Preferred stock 3. Stocks with warrants 4. Small cap stock 5. Blue chip stock 6. Convertible stock 7. Technical stock 8. Industrial stock 9. And on and on and on Real estate can be subdivided into: 1. Single family 2. Commercial office 3. Commercial retail 4. Multi-family 5. Warehouse 6. Industrial 7. Raw land 8. Raw land to the curb 9. And on and on and on Mutual funds can be subdivided into: 1. Index fund 2. Aggressive growth fund 3. Sector fund 4. Income fund 5. Closed end fund 6. Balanced fund 7. Municipal bond fund 8. Country fund 9. And on and on and on Why Investing Is Confusing 59 Insurance can be subdivided into: 1. Whole, Term, Variable Life 2. Universal, Variable Universal 3. Blended (whole and term in one policy) 4. First, second, or last to die 5. Used for Funding Buy-Sell Agreement 6. Used for Executive Bonus and Defferred Compen- sation 7. Used for Funding Estate taxes 8. Used for Non Qualified retirement benefits 9. And on and on and on c. There are many different investment products, each designed to do something different. That is another reason why the subject of investing is so confusing. There Are Different Investment Procedures 3. Rich dad used the word "procedure" to describe the technique, method, or formula for buying, selling, trading, or holding these investment products. The following are some of the different types of investment procedures: 1. Buy, hold, and pray (long) 2. Buy and sell (trade) 3. Sell then buy (short) 4. Option buying and selling (trade) 5. Dollar cost averaging (long) 6. Brokering (trade no position) 7. Saving (collecting) 4. Many investors are classified by their procedures and their products. For example: 1.1 am a stock trader. 2.1 speculate in real estate. 3.1 collect rare coins. 60 Rich Dad's Guide to Investing 4. I trade commodity future options. 5.1 am a day trader. 6.1 believe in money in the bank. These are all examples of different types of investors, their product specialties, and their investing procedure. All of this adds to the confusion on the subject of investing because under the banner of investing there are people who are really: a. Gamblers b. Speculators c. Traders d. Savers e. Dreamers f. Losers Many of these individuals call themselves investors and, technically they are, which is why the subject of investing is even more confusing. No One Is an Expert at Everything "Investing means different things to different people." Rich dad also said, "There is no one person who can possibly be an expert at the entire subject. There are many different invest- ment products and many different investment procedures." Everyone Has a Bias A person who is good at stocks will say, "Stocks are your best investment." A person who loves real estate will say, "Real estate is the basis of all wealth.