cashflow 101

3 Strategies for Escaping the Rat Race

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Three Strategies for Escaping the Rat-Race

Winning the Game

Strategies for escaping the rat race.

This is a three (3) part article that will show you three of the most effective strategies that I have employed in escaping the rat race in Robert Kiyosaki’s CashFlow 101 game. These articles will highlight the strengths and weaknesses of each strategy and give you play by play instructions as to how to employ each. While I encourage you to read all three parts of the article, you may use the links provided to jump to the strategy you feel is most applicable to you. I have allotted a name for each strategy depicting the founding principle of that strategy, the strategies are:

The Capital Gain Strategy
The Cash Flow Strategy
The Hybrid Strategy

Bonus
The Leveraging Strategy

Part 1

The Capital Gain Strategy

This strategy is based on capital gains realized from trading stock options. The game offers a variety of small deal cards, many of which are stock option deals. For each stock option there is a typical range through which the price fluctuates. There are also extremes in both the positive and negative directions. These extremes offer the unique opportunity that make this strategy an excellent one for escaping the rat race. For example, a stock such as OK4U typically trades between $5.00 and $40.00. However, there are situations in which the stock falls to as low as $1.00 and others when it will rise to as high as $50.00.

Stock Unique Opportunity

In order to build up capital for purchasing cash flowing assets I encourage you to wait for the stock to one of these depressing levels ($1.00 or $5.00) and purchase no less than 1000 units. When the stock rebounds you will be sitting on a pretty penny and will now be able to invest in big deals. Note also that unique opportunities such as stock splits may aid in accelerating your departure from the rat race.

Like most things in life, this strategy has it’s advantages and disadvantages. I have listed the upside and the downside to this strategy below.

 

The Upside.

 

1. Easily Raise Capital

Capital Appreciation #1

This is probably the best strategy for building capital since percentages as high as 5000% are possible.

 

2. The strategy offers some level of certainty.

There is a significant level of certainty that your stock will rebound as long as you adhere to the small deal opportunities.

 

3. This strategy presents the possibility of making even greater returns, up to 10,000%.

If you stick with the small deals, then you may encounter a unique opportunity such as a stock split. When this happens you will double the amount of units you hold for the stock. Consider a scenario where you purchase 1000 units of a company’s stock at $1.00, the company then undergoes a stock split thereby increasing your units to 2000. Then, the company rebounds and the stock goes up to $50.00. Your returns are as follows: 5000% yield from the appreciation to $50.00 and a further 100% of that 5000% since the stock split occurred. Thus your total yield is 10,000%.

 

The Downside

 

1. Stocks in the game do not offer cash flow

The most obvious downside to this strategy is that the stock options do not provide cash flow. You may spend 10,000 to purchase 1000 units of a stock at $10.00 (as per recommendation) but you will not be getting any cash flow whereas the same $10,000 could be used to make down payments on two real estate properties, each giving you positive cash flow.

 

2. You have to stay in the game longer.

Since this strategy relies heavily on the stock going up, you may have to stay in the rat race longer waiting for the time when the right card shows up allowing you to reap your desired capital gains. Further to this, you are confined to small deals until your stocks reach up to the desired sell price.

 

3. Gains may not be as high as you expect

Stock Disaster - Reverse Split

In much the same way that you may encounter unique opportunities that enable you to double your profit, you may also encounter unfortunate disaster cards. These may cause you to loose some or all of your potential profits and possibly your initial investment. The worse case scenario will materialize if you encounter a reverse split card then end up doing one of two things, either, purchasing an expensive liability (a new boat for example) or downsizing. You may guard against the latter by ensuring that you have more than your total expenses in cash at all times.

Watch this strategy in action here:

 

Let us know what you think of this strategy. Read the other two strategies here and here. Please let us know which strategy is your preferred route out of the rat race.

If you enjoyed this article, please like and share it. Also, if any one of you guys have won the game using the this strategy, we would love to hear how you did it.

The Videos in this article were made using bandicam which is available for free download on windows at {insert link}.

We would love if you film your gameplay and post it on YouTube. You could then post the link in the comment box below.

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