| Buy a property and rent it out. Make sure the | | | | money more quickly than a property investment. |
| monthly rental income is more than the monthly | | | | Secondly, no one may want to rent my shares. |
| mortgage loan repayment. In this way, there | | | | That is no one is buying a call option on my |
| would be a positive cash flow from the | | | | shares. This is like having a property where I did |
| investment. That is this investment would be | | | | not have any tenant. Thus, it is important to do |
| earning a passive income. According to my | | | | proper research before buying the shares just like |
| understanding of the Rich Dad's series by Robert | | | | I would do a proper research before buying a |
| Kiyosaki, investing in assets that earn passive | | | | property. |
| income is the way for me to become wealthy. | | | | Thirdly, there is a risk that I would be forced to |
| Other than real estates, are there alternative | | | | sell my shares at the agreed price if the option |
| assets that can generate rental income? Yes, | | | | buyer were to exercise the option. Since a share |
| there are quite a few assets that can achieve | | | | price could either go up, go down or remain the |
| that. For examples, I could buy a car and rent it | | | | same, the only situation where it make sense for |
| out. I could buy a yacht and rent it out. | | | | the option buyer to exercise the option is when |
| Do you know that it is possible to buy shares and | | | | he could make a profit by exercising the option. |
| rent them out too? When I first heard of the | | | | If the option buyer had bought a call option from |
| idea, I was very surprised and shocked to know | | | | me, then it would only make sense for him to |
| that such a thing is possible. To understand how | | | | exercise the option if the price of the shares |
| to rent out shares, there is a need to understand | | | | increases beyond the agreed price. In other |
| about options. | | | | words, there is a probability of 1/3 that an option |
| Based on my understanding, a call option is like a | | | | buyer may exercise to buy my shares. |
| written agreement between a shares owner and | | | | Lastly, there is a risk that my shares would |
| the potential buyer. In the agreement, the agreed | | | | become worthless! If a listed company were to |
| price and quantity are stated. Also, there is an | | | | become bankrupt, then the shares of the listed |
| expiry date on the agreement. | | | | company would become worthless. This is unlikely |
| For example, I could write an agreement for the | | | | to happen to a property. |
| potential buyer to buy my shares at an agreed | | | | The above list of risks for renting out shares is |
| price within a 30 days period. Then I would sell | | | | incomplete. After reading the Rich Dad Series by |
| this agreement to the potential buyer. The reason | | | | Robert Kiyosaki, I feel that there is a need to |
| that a potential buyer would buy from me is | | | | keep on learning to be wealthy. In this case, I |
| because he thought that the shares price would | | | | need to study more about option trading and |
| go up in the future and he would miss the chance | | | | share investments to get a more complete |
| to buy at the greed price that is cheaper. If the | | | | picture so that I could make better investment |
| potential buyer had decided not to buy the shares | | | | decisions. |
| from me at the agreed price within the 30 days | | | | * DISCLAIMER * |
| period, the agreement would expire and become | | | | The author only provides the material and |
| worthless. That is I would earn the fee of selling | | | | information as a layperson's views about an |
| this agreement as rental income. This is like leasing | | | | important subject. The materials and information |
| my property to a tenant for 30 days. | | | | are from sources believed to be reliable and from |
| Buying shares and rent them out is not the same | | | | his own personal experience, but he neither implies |
| as buying property and rent it out. The risks | | | | nor intends any guarantee of accuracy. |
| involved maybe similar in some but different in | | | | All the materials, information and procedure in this |
| others. By gaining financial literacy through financial | | | | book are only the author's personal opinion. You |
| education, I would be in a better position to | | | | must consult your own professional advisor and |
| identify and manage the risk. That is why I | | | | other reputable sources on any matter that |
| agreed with the Rich Dad's series by Robert | | | | concerns you or others. |
| Kiyosaki that financial education is essential. | | | | The author, publishers and distributors are not |
| What are the risks of renting out shares? | | | | competent and do not profess to give legal, |
| Firstly, a share price may go up or down or | | | | accounting, medical or any other type of |
| remain the same. Though I could earn rental | | | | professional advice. The reader must always seek |
| income for my shares, if the price of the shares | | | | those services from competent professionals who |
| were to drop, I would end up losing money. | | | | can review your own particular circumstances. |
| Similarly the valuation of a property may go up or | | | | The author, publisher and distributors particularly |
| down or remain the same. I would be losing | | | | disclaim any liability, loss, or risk taken by |
| money if the price of my property were to drop. | | | | individuals who directly or indirectly act on the |
| The slight difference is that the share price is | | | | information contained herein. All readers must |
| more volatile compare to a property. Thus, I | | | | accept full responsibility for their use of this |
| would be able to see whether I making or losing | | | | material. |