This article is my jotting down of points from a video record of one of my financial role models: Robert Kiyosaki. The article is based on his life and financial experiences.
Whatever you learnt from this article has been legitimately proven. No cause for concern.
There are lots of education. There's sex education, music education, physical education etc. Stuffs like that but to be successful in the world of business, there are three basic education you must have.
1. Academic education: This involve reading and writing. "Very important though I didn't do well there". Said Robert
2. Professional education: Doctor, Lawyer, secretary. Robert said he had two professions: Sailer, third mate on board in a oil tanker and piloting. Just didn't want to fly anymore though some of his friends still do that.
3. Financial education: What we'll be covering in this article.
What I realized as a young boy is that I could beat my friends over academic education and professional education if I understood financial education. In other words, I can make more money in (3) than the guys in (1) and (2). The beauty of the world of finance today is that; if you understood finance, you could make money everyday without working.
What this article will be covering is "How To Make Money 24/7 Without Working". That makes a lot more sense than working hard over time. The basics of financial education begins with an income statement and a balance sheet. These are the fundamentals if you're going to be wealthy. What people get messed up is that they call their houses assets and that's the problem. They call their cars an assets. I made mention of two basics of financial education which are income statement, balance sheet and the third I'll add is statement of cashflow. Rich Dad said " Assets put money in your pocket whether you work or not". Liability takes money from your pocket. I hope you grab the two concepts. The reason why people are afraid of losing their job is because they have "think as" assets. So, they have to keep going to work. The other mistake that people make is that because they think their houses are asset, they buy big houses because it will appreciate. What they have is mortgage and mortgage stands for debt. It kills you. I'm not against mortgages. So, people buy more house, big boat, BMW, Lexus etc. They have a job. Money comes in and goes out though liability. Robert called this "financial diarrhea". Cash flows out continuously 24/7. People in the Employee and Self-employed quadrant thinks salary is the most important. There are four basic asset classes that make people rich.
1. Business: Not just business but business on the right side of the above quadrant; Business owner and Investor quadrant. Guys like Bill Gates created Microsoft, Jobs created apple. Business is number one asset that's why you have to learn how to sell because it's necessary.
2. Real estate: Property that cannot easily be moved, usually buildings and the ground they are built on. Property!
3. Paper: Stocks, bonds, mutual funds, trusts. Stuffs like that are called paper.
4. Commodity: Gold, silvermine, coppermine, oil company.
Pay good attention to these four assets. If you acquire one or more of them, they put money in your pocket whether you work or not.
For those in the Self-employed quadrant, their problem is that; once they stop working, their income stops. These four assets keep income coming in 24/7 whether you work or not. Train yourself to work with this article.
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