In Rich Woman, Kim Kiyosaki talks about investing for one of two reasons. The first is for capital gain and the second is for cashflow. The important thing to know before beginning to invest is what your goal is. Even without realising this distinction between the two, my mind has always been geared towards cashflow.

If you’re like me before I read Rich Woman, then you’ll probably want to know what the difference between the two is. So here it is:

Cashflow – you buy a property and the rental you get from this property per month is more than your expenses on this property per month. Hence you have positive cashflow from this investment.

Capital gain – you buy a property. Hold onto it for a few years and sell it for more than what you paid for it.

I’ve often heard of people talking about buying properties for investment purposes and talking about holding onto it with the hope that it will appreciate over the years. What I don’t get is why they never consider what they can get from the property in terms of rental? Isn’t it better to get some return from money in your investment along the way? If the property appreciates and sells for a good price later on, all the better!

My brother had a friend who is probably one of the few doctors I’ve met who has a great head for investing. The first apartment he bought generated a positive cashflow through the rental he got. He never had to fork out extra cash to pay back the loan that he took to buy the apartment because the rental he got from it was more than his monthly instalment.

Sometimes I wish I’d gotten started on all of this a lot earlier, but I guess it’s as they say, “Better late than never.”

In many of their books, Robert and Kim often talk about their journey where they started with nothing. Robert Kiyosaki introduces the idea that you can start investing even if you don’t have the money – or at least, that’s what I understood when I read the book. Frankly, I still it a difficult concept to grasp but I figure that if they did it, then it must be possible.

Every time I find myself thinking that it isn’t possible, I recall a lesson I learned in rock climbing. Sometimes a rock face may seem “impossible” to climb and everyone believes this until the first person achieves the “impossible”. Suddenly, everyone else is also able to climb the “impossible”. Impossible is only that because we haven’t yet seen the light.

Well, I’m still looking for the light. I guess that’s what this journey is all about.