The Way a Sophisticated Investor Think and Act

We have shared before Category of Investors According to Robert Kiyosaki in which one of them is a Sophisticated Investor.

Sophisticated investors are those that always think far ahead and outside the box unlike other investors out there. They are very knowledgeable when it comes to the laws and regulations, especially when doing any transactions related to shares.


The main objective of all investors is the same which is to gain profit and wealth.

According to the book written by Robert Kiyosaki called Guide to Investment, Rich Dad stated that learning through experience until you manage to build your own business is the way to become a sophisticated investor.

Some of the ways in which a sophisticated investor thinks and act comprises:

1. Collect and Buy Assets, Reduce Liabilities

A sophisticated investor will always ensure that they have a lot of money to be saved as well as strong financial security. They will tend to buy assets such as houses, gold, and even stocks.

In addition to all of that, they will also try to reduce their own liabilities which cause a lot of cash outflows.

2. Convert Personal Expenses to Business Expenses

Most of the personal expenses will be analyzed first before converting to a business expenses for a sophisticated investor. They will always try to reduce their personal expense as well as tax payments so that they can invest the money more in their businesses.

3. Tightening things up

A sophisticated investor just loves to tighten things up, especially when it comes to their expenses. Not just that but their businesses will always be documented each time with a financial statement. They will not face many problems since they will understand each of the problems they encounter. 

A non-sophisticated investor, on the other hand, will start having problems at their end. There are also several other important things that a sophisticated investor needs to bear in mind aside from the financial statement.

a) Control over access to information

It is also known that a sophisticated investor is involved in getting access to information as an inside investor. Investors will need to know all type of information regarding the rules and regulation that has been set by the Security of Exchange Commission(SEC) in America as well as other types of organization in different countries.

b) Control over the act of giving a.k.a. Philanthropist 

Apart from their own financial control, it is also crucial for a sophisticated investor to emphasize social responsibility and give back to the community. This is similar to successful people like Bill Gates who established the Melinda Gates Foundation which plays a role in helping people in need. 

However, the system of capitalism like providing job opportunities and the development of the economy is also being practiced by society.

What can be said is that sophisticated investor has their own unique ways to solve problems and act on the situation. But one thing that is true is that a sophisticated investor will make any company become successful and rake in profit each year. 

Every single transaction is analyzed with detail and precision to reduce risk and maximized profit.

Do you guys think you have what it takes to become a sophisticated investor?

Source: Majalah Labur

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