Richdads-CASHFLOW-Quadrant-

Chapter Two
When Kim and I were escaping from financial struggle to
financial freedom, we didn’t diversify. We concentrated our
investments.
2. Blue chip stocks
Security-minded investors usually buy blue-chip companies.
Why? Because in their mind, they’re safer. While the company
might be safer, the stock market is not. These stocks won’t
protect your money in a market free fall.
3. Mutual funds
People who know little about investing feel more secure turning
their money over to a fund manager who they hope will do a
better job than they can. This is a smart strategy for people who
have no intention of becoming professional investors. But the
problem is that, as smart as this strategy is, it doesn’t mean that
mutual funds are less risky.
Today, the market is filled with millions of people who, by nature,
are security-minded. But, due to the changing economy, they are being
forced to cross from the left side of the CASHFLOW Quadrant into the
right side, where their brand of security doesn’t really exist. That causes
me concern.
Great Economic Upheavals Coming
The stage is set for a great economic upheaval. Such upheavals have
always marked the end of an old era and the birth of a new one. At the
end of every age, there are people who move forward, and other people
who cling to ideas of the past. I’m afraid that people who still believe
their financial security is the responsibility of a big company or big
government will be disappointed in the coming years. Those are ideas
of the Industrial Age, not the Information Age.
No one has a crystal ball. I subscribe to many investment news
services and each one says something different. Some say the near future
is bright. Some say a market crash and major depression are right around
the corner. To remain objective, I listen to both sides, because both
have points worth listening to. I do not play fortune-teller, trying to
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