Chapter 12 Investor Lesson #10: Why Investing Isn't Risky People say, "investing is risky" for three main reasons: 1. They have not been trained to be investors. If you read CASHFLOW Quadrant, the sequel to Rich Dad Poor Dad, you will recall that most people go to school to be trained for the left side of the Quadrant rather than the right side of the Quadrant. 2. Secondly, most investors lack control or are out of control. My rich dad used this example: He would say, 114 Rich Dad's Guide to Investing "There is risk driving a car. But driving the car with your hands off the steering wheel is really risky." He then said, "When it comes to investing, most people are driving with their hands off the steering wheel." Phase One of this book is taking control of yourself be- fore investing. If you didn't have a plan, a little disci- pline, and some determination, the other investor controls would not mean much. The rest of this book will go into the remainder of rich dad's ten investor controls. 3. Thirdly, people say investing is risky because most people invest from the outside rather than from the inside. Most of us know intuitively that if you want a real deal, you have to be on the inside. You often hear someone say, "I have a friend in the business." It does not matter what the business is. It could be to buy a car, tickets to a play, or a new dress. We all know that on the inside is where the deals are made. The invest- ment world is no different. As Gordon Gekko, the vil- lainous character played by Michael Douglas in the movie Wall Street, said, "If you're not on the inside, you're outside." We will review this relationship between being on the out- side or inside later. What is interesting to note at this time is that people on the left side of the Quadrant usually in- vest from the outside. In contrast, Bs and Is are able to in- vest from the inside as well as the outside. An Important Note As this book progresses, many sacred money cows may be slaughtered. Inside investing is one of them. In the real world, there is legal inside investing and there is illegal inside invest- ing. That is an important distinction. What makes the news is Why Investing Isn't Risky 115 the illegal insider investing. Yet, there is more legal insider in- vesting in the real world that does not make the news, and that is the type of inside investing I am talking about. A hot tip from a taxi driver is in many ways an insider tip. The real question in insider investing is really: "How close to the inside are you?" Rich Dad's Plan When rich dad listed the three core financial values, which are: 1. To be secure, 2. To be comfortable and 3. To be rich, he said, "It makes perfect sense to invest from the outside when you invest at the secure and the comfortable level of in- vesting. That is why you turn your money over to a profes- sional you hope is closer to the inside than you.