" 'And that is how you found that big piece of raw land-just walking down the street," I commented, recalling how rich dad found one of his best pieces of real estate. "You saw that the 'For Sale' sign had fallen down and had been trampled on so no one knew the land was for sale. You called the owner and offered him a low but fair price at your terms and he took it. He took your offer because no one else had made him an offer in over two years. That is what you mean, isn't it?" "Yes, that is what I mean, and that piece of raw land was a better deal than most. That is what I mean about being pre- pared. I knew what the land was worth and I also knew what was going to happen in that neighborhood in a few months, so there was very low risk coupled with a very low price. I would love to find ten more pieces of land today in that same neighborhood." "And what do you mean by 'Don't predict'?" I asked. "Well have you ever heard someone say, 'What if the mar- ket crashes? What will happen to my investment then? That is why I am not going to buy. I am going to wait and see what happens'?" "Many times," I said. "I have heard many people, when presented with a good investment opportunity, back away from the investment be- cause their core fears begin to predict the disasters that will occur. They sent out their negative vibes and never invest... or they sell when they shouldn't sell and they buy something The Basic Rules of Investing 139 they shouldn't buy based on either optimistic or pessimistic emotional predictions." "And that would be handled if they were a little educated, had a little experience, and were prepared," I said. "Exactly," said rich dad. "Besides, one of the basics of being a good investor is being prepared to profit when the market moves up or if it moves down. In fact, the best investors make more money in a down market move simply because the mar- ket falls faster than it rises. As they say, the bull comes up the stairs and the bear goes out the window. If you are not cov- ered for either direction, you as the investor are too risky... not the investment." "That means many people predict themselves right out of being rich investors." Rich dad nodded. "I have heard so many people say, 'I don't buy real estate because I don't want calls at midnight to fix toilets.' Well I don't either. That is why I have property managers. But I do love the tax advantages that cash flow from real estate offers that stocks do not." "So people often predict themselves right out of opportu- nities, instead of being prepared," I echoed, beginning to un- derstand why being prepared was so important. "How do I learn to be prepared?" "I'll teach you some basic trading techniques that all profes- sional investors should know, techniques such as shorts, call options, put options, straddles, etc. But that will come later. Right now, that is enough about the advantages of preparation over prediction for you.