Home
>
Wealth Building
>
Increasing Your Wealth by Increasing Your Financial Literacy

Increasing Your Wealth by Increasing Your Financial Literacy

Perhaps the primary message of Rich Dad, Poor Dad is increasing basic financial literacy. Perhaps I should say financial literacy for the common man and woman. The reason I say this is because the principles taught in the book are very simple--the fundamental personal finance. Some people may even say the what Kiyosaki teaches is dangerously simplistic.

I think those people are missing the point. While it is true that if you want to build significant wealth, you will need to study finance and business in greater depth, what I think that "Rich Dad, Poor Dad" and "Cash Flow Quadrant" teaches well is a high level view of how cash flows through your life. And one of the first things you must do in order to begin accumulating wealth is to understand and take charge of your cash flow.

Once you understand how you create cash and understand the flow, you can begin to make simple to complex changes to accumulate more and more cashflows. And just like water that flows into a glass begins to accumulate, your wealth will rise and eventually overflow with abundance.

Here are some of the key points about financial literacy in the "Rich Dad" book:

1) Your greatest "wealth" is not money. It is your state of mind, your thinking and understanding--proper (not necessarily conventional) education. Once you learn how to make a lot of money, even if someone takes it all away, you still have the knowledge to re-create it and more. Even more important, if you have profound financial knowledge, there is much less chance that you will ever lose it once you create it. The lesson: invest your time and your money studying how to create positive streams of passive cash flow.

2) It's not only how much money you make, it's how much you keep. As cash flow comes in, you have to be watchful not to spend it as fast or faster than you make it. Track and control your finances.

3) Understand the difference between assets and liabilities. This is one of the most controversial points in the book. According to Kiyosaki, an asset puts cash in your pocket, a liability takes out cash from your pocket. These are not academically correct definitions, but they are very helpful in getting control of your cash flow.

4) In order to be rich, accumulate assets. Most people get into financial trouble by accumulating liabilities (especially credit card debt). The most common reason this happens is due to a lack of understanding, lack of intelligence of what is happening to their cash flow pattern.

5) If you accumulate a lot of money, but do not have the intelligence to understand how to effectively manage your cash flow, an increase in money can actually accelerate the problem. 6) Here is one point that I'm still wrestling with: your home is not an asset. It may be an asset on your balance sheet, but because it is taking money out of your pocket, it is a liability. He's not saying don't buy a home. He's saying don't call it an asset when it is really a liability.

7) When you are in the process of building your wealth, exercise financial discipline to maximize what you spend on cash producing assets and minimize what you spend on cash draining liabilities. Saving is not enough if you are not buying cash producing assets.

8) One point that is emphasized more in his game Cash Flow (highest recommendation) is his definition of a "doodad." I absolutely love this term, because it interrupts your buying pattern and helps you take control of your spending habits. Doodads are those material possessions that we spend our money on that are really liabilities. Like that luxury car that is really beyond your current means. Or that new television set that you just had to have. Or as simple as that new DVD. Buying dodads at the time you should be buying assets is the one of the primary causes of financial trouble.

9) He is not saying don't buy doodads. The point is to buy assets before you buy doodads. And then let the extra income that is generated by the assets pay for your doodads. Put first things first.

10) The poor, middle class, and wealthy all spend money. Where they eventually end up depends on the the intelligence and wisdom they develop and what they choose to accumulate. What you focus your thoughts on expands. If you focus on increasing your knowledge and assets, they will accumulate. If you focus on doodads and indiscriminate spending (even unconsciously), you will accumulate liabilities.

So, what are some Power Affirmations to help condition your mind to automatically act on these ideas? One thing I hope you will notice about these affirmations: many of these are very specific. They go way beyond such platitudes as "I love myself."

When I create and use affirmations, I'm interested in focusing on specific strategies and thought patterns I need to have in order to achieve my objective. When was the last time you saw an affirmation that included tax accountants and bankers? But the truth is you need these people on your team if you are going to build massive wealth. So you may as well condition your mind that they will be in your life, that you are comfortable in dealing with them, and that they work for you.

Here are the new affirmations:

1) My financial intelligence is now multiplying everyday.

2) I am the master of my money. I track and manage my cash flows.

3) I carefully accumulate cash producing assets.

4) I pay myself first. And I use the cash I save to buy more and more assets.

5) I now surround myself with expert financial advisors: tax accountants, real estate brokers, bankers, attorneys, and investors. Outstanding advisors now work for me.

6) I study and fully understand financial statements. When I study financial statements, I rapidly understand the cash flow patterns behind the numbers.

7) I now have an outstanding balance sheet rich with cash producing assets.

8) When I spend money, I minimize doodads and maximize assets.

9) I clearly understand the difference between assets and liabilities.

10) When I make a purchase, I ask myself "am I turning cash into trash, or into cash producing assets?" I choose assets.

11) My cash producing assets now exceed my personal expenses and buy more cash creating assets. I am now on the fast track of life.

One last point. As good as the "Rich Dad, Poor Dad" book is, Robert Kiyosaki's game "Cashflow" really helped clarify the most important concepts. I use the computer version. Given my time constraints with my business, I find it easier to set aside time to play it periodically. Even though it is a simplistic view of how the world works, and is heavily biased towards real estate, I found it extremely educational. As a side note, I majored in business in college, but there is very little I learned from my courses that I feel increased my financial intelligence. That has come primarily from studying books like "Rich Dad, Poor Dad," and "Think and Grow Rich." Do not underestimate the power of self education!!!

For practical self-improvement tips, visit http://www.poweraffirmations.com. Get my new free e-book, "Power Affirmations: Power Positive Conditioning for Your Subconscious Mind"

one time home cleaning Highland Park ..

In The News:

Privacy risks are hiding in plain sight, as your personal data is likely being collected, tracked, and sold without your knowledge.

VenHub, a fully autonomous, AI-powered smart store just opened at the LAX/Metro Transit Center in Los Angeles.

A woman's Facebook account takeover reveals dangerous social engineering tactics and provides lessons on recovery, avoiding scams and enacting stronger security measures.

Shanghai engineers are using 432 walking robots to relocate a complex, preserving Shikumen architecture while creating space for a modern underground hub and cultural center.

Major healthcare data analytics firm Episource had a cybersecurity incident exposing 5 million patients' medical records and personal information in recent breach.

A new sophisticated PayPal scam sends legitimate-looking emails from official PayPal addresses, using phone numbers instead of links to convince victims to download remote access tools.

Fox News' AI Newsletter brings you the latest on this rapidly evolving technology.

The innovative Kara Pod device extracts moisture from air to create mineral-rich water and brew coffee, featuring UV sterilization and compatibility with Nespresso pods.

Gov. Hochul unveiled New York's nuclear power plant project to power a million homes, which faces permit challenges while promising jobs and a cleaner energy future.

SAFE introduces Aerie, an underground luxury bunker combining high-end living with advanced security, wellness amenities and interactive walls simulating panoramic views.

A Facebook scammer posing as Elon Musk tricked a victim with promises of a Tesla and $250,000, requesting gift cards that become untraceable once the codes are shared.

Experience hands-free golfing with the Robera Neo smart caddie that uses AI to follow you, navigate obstacles and carry your clubs with GPS course mapping.

Cybersecurity alert: 16 billion passwords exposed in massive credential database affecting major platforms. Protect your accounts with password managers

The innovative BeBot robot uses electric power to remove pollution from shorelines, covering 20-30 times more area than manual collection while preserving wildlife.

A new ClickFix campaign targets macOS users with fake Spectrum support sites, tricking victims with CAPTCHA failures to paste commands that install information-stealing malware.

AI-powered autonomous trucks from Plus Automation are being tested across the U.S., Europe and Asia to solve logistics challenges while facing regulatory hurdles and labor concerns.

Your health information might feel private and secure with your doctor, but the reality is far more complicated. Data brokers collect a wide range of sensitive health data, from diagnoses and prescription details to personal identifiers, and sell this data to marketers, insurers, and other third parties.

Kepler Robotics has officially introduced its Forerunner K2 "Bumblebee" humanoid robot at the SAIC-GM automotive plant in Shanghai, marking a significant moment in the real-world deployment of advanced robotics.

Scammers never seem to be running out of new ways to try and get their hands on your money – and lately, they've been getting sophisticated.

Thirty people were injured and killed, though the exact number remains currently unknown, when a suicide bomber blew himself up in a Damascus church.

Unexpected password reset alerts signal potential hacking attempts or phishing scams. Learn how to respond and establish stronger security measures for your accounts.

A historic electric airplane flight landed at JFK with passengers, marking a milestone as Beta Technologies demonstrates the practicality and efficiency of electric air travel.

The Chaos ransomware group breached Optima Tax Relief in a double-extortion attack, stealing sensitive customer case files and corporate documents with personal information.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

The first human brain-computer interface by Paradromics was completed in 20 minutes, featuring microelectrodes to help paralyzed individuals control computers with thoughts.

Increasing Your Wealth by Increasing Your Financial Literacy

Wealth Building