Rich Dad taught how to have excess cash, becoming a sophisticated investor, in five phases; Being mentally prepared to be an investor, decide the type of investor you want to be, how to build a strong business, who is a sophisticated investor, and giving it back.

Investor Lesson #2: Pouring a Foundation of Wealth. Rich dad started poured his foundation of wealth through building businesses and buying real estate and working on a plan. The reason you build businesses is to buy assets because buying assets outside of a business is riskier and has fewer tax benefits. The rich don't work for money, they know how to have money work for them.

Investor Lesson #3: The Choice. Investing starts with a mental choice to be rich, poor, or middle class. It is a very personal decision that will change everything in your life. The choice you make will force you to prioritize financial security, comfort, or wealth. If financial security is most important to you, then you will seek a job. If you choose to be rich then you are able to remain uncomfortable until your reach your goal.

Investor Lesson #4: What kind of world do you see. There are only two types of money problems; too much money or not enough money. Whichever one is true for you, will be how you see the world. The more security you need the more scarcity and competition in your life. Rich people never say they can't afford it, instead, they ask themselves "how can I afford it?". Until you see the world differently, you miss opportunities directly in front of you.

Investor Lesson #5: Why investing is confusing. Investing means different things to different people using many different investment products and procedures. For this reason, no one can be an expert on the entire subject of investing; everyone develops a bias. What most people call investing is not really investing. Under the banner of investing there are people who are really gamblers, speculators, traders, savers, dreamers, and losers. Adding to the confusion everyone has different opinions on the direction of the market and the future of the world. One person may say the investment is good and another person may say it is bad and they both may have valid points.

Investor Lesson #6: Investing is a plan; not a product or procedure. The answer I give to "I have $10,000 to invest, what should I invest in?" is do you have a plan? It doesn't matter if you have money or which market you are thinking of investing in. Investing is a very personal plan. Investment products are often called investment vehicles because they satisfy many different needs and the point is to get from point A to Point B. Investing is like planning all the legs of a trip factoring in the time you may have, the reasons you are going, and different vehicles you may need. Don't get attached to the investment vehicle rather focus on your plan.

Investor Lesson #7: Are you planning to be rich, or are you planning to be poor?. If you want to see a person's past, present, and future, just listen to his or her words. the idea that it takes money to make money is one of the worst ideas there is, especially if a person wants to make more money. It does not take money to make money; you must simply increase your financial vocabulary. In order to be comfortable in their profession, A lawyer must learn the vocabulary of law, a medical doctor must learn the vocabulary of medicine, and an investor must learn the vocabulary of finance. Furthermore, nothing is more destructive to a person's financial stability than using the wrong financial definition; such as calling a liability an asset. A lot of people are planning to be poor when they state "When I retire, my income and my needs will go down".

Investor Lesson #8: Getting rich is automatic if you have a good plan and stick to it. Nine out of ten investors fail to make money. Investing is not an exciting process where there is a lot of drama, it is a dull, boring, almost mechanical process making of formulas and strategies the almost guaranteed to get you rich. Rich dad found his formula from playing monopoly, if the formula is too complex then it is not worth following. Keeping it simple is the best rule for investing.

Investor Lesson #9: How can you find the plan that is right for you?. You can find the right plan for you by taking time to think about your life up to this point, figure out what you want from life, don't talk to anyone else about what you want until you are more than sure, find the best financial advisors, preferable those who have already done what you are trying to do, for you to begin developing a written financial plan, and keep that plan up-to-date as your progress. Your plan should stay the same but it should be improved upon with life experiences. Set realistic goals and then improve upon them or add more as your education and experience increase. Investing is a team sport, continue to build your financial team with may include a banker, accountant, lawyer, broker, bookkeeper, insurance agent, and successful mentor. Your plan shouldn't change but you must allow it to change you.

Investor Lesson #10: Decide now what you want to be when you grow up. The importance of the three financial core value choices, to be secure, comfortable, or rich, should not be taken lightly. If you want to be rich then you need a plan to be secure, comfortable, and rich. If you want to be comfortable you need a written lifetime plan to be secure and comfortable. Most people never become rich because they don't understand what it really means to be financially secure or comfortable. If your plan is to be rich then writing a plan to be secure and another to be comfortable will be difficult, boring, and you may not want to follow it but you should. In making the plans you will uncover what is financially possible for your life.

Investor Lesson #11: Each plan has a price. The difference between the plan to be rich and the plan to be comfortable or secure is the price. The price is not measured in terms of money but rather in time; the more precious asset. The more you think of time as precious and that it has a price, the richer you will become; think of buying time rather than saving time. Many people work hard at trying to save money but they waste a lot of time. Saving is important and it is possible to become rich by saving but the price is really measured in time. If you become rich by being cheap then you will eventually have a lot of money but you will still be cheap. Most people want to get rich but are not willing to invest the time in basic skills and experience and they end up losing both time and money. There is no such thing as 'risk-free' but certainty comes from education and experience; both of which cost time.

Investor Lesson #12: Why investing isn't risky. People say investing is risky for three main reasons; they have not been trained to be investors, they lack control of themselves, their plan, and their investments, and they invest from the outside rather from the inside. It is important to note that there is legal inside investing and illegal inside investing, this book is talking about legal inside investing. If you want to be rich you have to get closer to the inside than even the professionals to whom most people entrust their money. To do that you must invest a lot more time than the average investor on business and investments. Investing is a very personal subject so decide if you are willing to follow rich dad's investment plan or find one that would work better for you.

Investor Lesson #13: On which side of the table do you want to sit?. Working hard and saving money is important if you want to be secure and comfortable but if you want to be rich, saving money will probably not get you there. People who work hard and save money often pay more than their fair share in taxes, think investing is risky, and avoid learning something new on the other side of the coin. Investing isn't risky if you learn how to operate from all four quadrants; meaning on the business and investor side of the Cashflow Quadrant and the employee and self-employed side.  The most important quadrant is the investor. You can live any life you want in any quadrant if you master the investor quadrant first.

Investor Lesson #14: Basic rules of investing. You are not in competition with anyone else, focus on improving your experience and education. Once your two plans for security and comfort are in place, then you can experiment and learn more exotic techniques utilizing different investment vehicles. Basic rule number one is to always know what kind of income you are working for; ordinary earned income, portfolio income, or passive income. Basic rule number two is to convert ordinary earned income into portfolio income or passive income as efficiently as possible. Basic rule number three is to keep your ordinary earned income secure by purchasing security you hope converts your earned income into passive or portfolio income. Note that securities are not necessarily assets. An asset puts money into your pocket and a liability takes money from your pocket. Basic rule number four is that it is the investor who is really the asset or the liability. Investing is risky but it is really the investor who is risky. Basic rule number five is that a true investor is prepared for whatever happens; a non-investor tries to predict what and when things will happen. If you are prepared, there is a deal of a lifetime being presented to you every day of your life. Basic rule number six is if you are prepared, which means you have education and experience, and you find a good deal, the money will find you or you will find the money. If a good deal does not attract the money is it because the person controlling the deal did not attract the cash. Basic rule number seven is the ability to evaluate risk and reward. At this level, the investor should have the three E's; education, experience, excess cash. He knows the difference between good losses and bad losses, good debt and bad debt, good expenses and bad expenses, and can explain the investment in less than two minutes in a way it could be understood by a 10-year-old. Investing is a subject you can learn the basics of for the rest of your life.

Investor Lesson #15: Reduce risk through financial literacy. The way to become an investor who makes a lot of money with very little risk and then hangs on to the money is to keep things simple and understand the basics. If you are not willing to investing your time, then leave your investment capital with people who are following the investment plan of your choice. The number one control you must have to be an investor is control over yourself and your emotions. Gresham's law states that bad money will always drive out good money. So when the government started printing more and more money making it worthless, the rich focus on turning that worthless money into assets. Unfortunately the poor and middle class buy things that have even less value than their money; turning cash into trash. You can reduce the risk of investing by learning to read financial statements, understanding how to run a business, and becoming financially literate. A financial statement allows you to see the internal strengths and weaknesses of the investment. You can find the best investment opportunity from understanding accounting, the tax code, business law, and corporate law.

Investor Lesson #16: Financial literacy made simple. The relationship between the income statement and the balance sheet is the basics of financial literacy; you can't truly understand one without the other. The most important words in business and investing are cash flow; an investor must be keenly aware of the subtle shifts in cash flow. Literacy lesson number one is to use the direction of cash flow that determines if something is an asset or a liability at the moment. Just because you list something in the asset column, doesn't make it an asset. Assets are proven by the income statement showing more income than expenses from the security. Don't count your chickens before they hatch. Literacy lesson number two is it takes at least two financial statements to see the entire picture. Your expense is someone else's income. The more you read financial statements, annual reports, and prospectuses, the more your financial intelligence will increase.

Investor Lesson #17: The magic of mistakes. Unlike the world of academics, mistakes are opportunities to learn something new. When you come to the boundaries of what you know it's time to make some mistakes. To be successful in the real world of business, you have to be school smart as well as street smart. In schools, you are given the lesson first, but on the street, you're given the mistake first, and then it's up to you to find the lesson if you ever find it. Since most people have not been taught how to make mistakes and learn from them, they either avoid mistakes altogether, which is a bigger mistake, or they make a mistake but fail to find the lesson from the mistake. People may be doing all the right things, but the problem is that they are avoiding the wrong things. Instead of avoiding risks and mistakes, learn to manage them.

Investor Lesson #18: What is the price of becoming rich. You can become rich by marrying someone for his or her money, being a crook, through inheritance, winning the lottery, being outstanding in one field or another, being greedy, being cheap, or being financially smart. If you have the education and experience, you will always have plenty of money. The price of being financially free requires time and dedication to gain the education, experience, and excess cash. You can become rich by being generous, and you can only serve so many people being in the E and S quadrant. If you build large operating systems in the B and I quadrants, you can serve as many people as you want; doing so you will become richer beyond your dreams. To be a rich investor, you must have a plan, be focused, and play to win. In addition to the three E's rich dad states, you need the five D's; Dream, Dedication, Drive, Data, and Dollars. It Is focus on the first three D's that ultimately gains you the data and dollars you need to become very, very rich.

Phase One, preparing your mind to become a rich investor, is the most important phase. Money is just an idea and if you think money is hard to get and you'll never be rich, then it will be true for you. The rich, even before they have money, see a world full of opportunity and too much money. If you believe you can achieve, work hard to do so, then you will.