What might be an asset today could be a liability to- morrow. 6. While millions of investors lost money in 1986, there were other investors that were prepared for the change. Those who were prepared made the millions that the unprepared investors lost. The Biggest Risk of All Rich dad said, "The riskiest investor of all is a person who is out of control of his or her personal financial statement. The riskiest of all investors are those who have nothing but li- abilities they think are assets, have as much in expenses as they have in income, and whose only source of income is their labor. They are risky because they are often desperate investors." In my investment classes, I still have people come up to me and argue that their home is an asset. Recently one man said, "I bought my house for $500,000 and today it's worth $750,000." I then asked him, "How do you know that?" His reply was, "Because that is what my real estate broker said it was worth." To which I asked, "Will your broker guarantee you that price for 20 years?" "Why no," he said. "He just said that was the comparable average price of houses in the neighborhood being sold today." And that is exactly why my rich dad said the average in- vestor does not make much money in the market. Rich dad said, "The average investor has the count your chickens be- fore they hatch mentality. They buy items that cost them money each month, yet call them assets based upon opin- ions. They count on their house going up in value in the fu- ture, or they act like their house can be sold immediately for 178 Rich Dad's Guide to Investing what their real estate broker told them it is worth. Have you ever ended up selling your home for less than what your bro- ker, or banker thought it was worth? I have. As a result of bas- ing financial decisions on these opinions and expectations, people lose control over their personal finances. That to me is very risky. If you want to be rich, you must take control over your education as well as your personal cash flow. There is nothing wrong with hoping the price of something goes up in the future as long as you do not lose control of your finances today." He would also say, "If you're so certain the price is going up why not buy 10 of those houses?" This mentality also applies to people who say, "My retire- ment account is worth $1 million dollars today. It will be worth $3 million when I retire." Again, I would ask, "How do you know that?" What I learned from my rich dad was that the aver- age investor often "Counts their chickens before they hatch." Or they bet everything on one event which means they literally "Wait for their ship to come in," sometime in the future. In most cases, many eggs do hatch and most ships do eventually come in. Yet the professional investor does not want to take that chance. The sophisticated investor knows that being finan- cially educated gives you more control today and if you keep studying, greater financial control tomorrow.