Money Management Lessons Learned From The Book Rich Dad Poor Dad! Personal Assets & Liabilities! (#26)
In the book— Rich Dad Poor Dad; Robert T. Kiyosaki explains the concept of Personal Assets & Liabilities which alligns properly with Money Management.
Here, the term "PERSONAL" Assets & Liabilities refers towards as an individual's wealth & not of a Business's OR a Company's.
Today we are going to discuss about some important points taken away from the book Rich Dad Poor Dad!
Golden Nuggets From A Life Changing Book!
So let's start with what basically Assets & Liabilities are....
So according to Robert T. Kiyosaki—
Assets is something which puts money into your pocket.
Where as,
A Liability is something which takes money out of your pocket.
This definition given by the author is very basic! Yet, completely correct.
Both of them are completely opposite to each other.
Asset is the opposite of a Liability & vice versa.
Ok well, now what Assets can you basically think of.... right now?
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Anyways, so let's dig a little deeper in the details of Assets & learn more....
As I said, "Assets is something which puts money into your pocket!" & from Assets I mean not doing a job instead your money generating more money.
In fact, when you'll learn how to make your money work for you then just remember taht you are very close to achieving Financial Freedom.
& Assets don't REALLY require TIME as any job do!
"The Rich Knows How To Make Their Money Work For Them!"
This part of the article, must have been pretty surprising for those who haven't read the book, yet....
Note -- I'll let y'all know 'bout an app which lets you read the full book Rich Dad Poor Dad for free. You just need to download thhe app & then you acn Start Reading! App available at playstore.
So Continue Reading to not to miss out this opportunity!
Ok anyways,
So, I know that this part of the article explaining exactly what Asset are is still not that clear.... So let me try making it a bit more transparent.... with examples for y'all!
You know what?
Instead of keeping the money in our Bank Account(s) AT REST.
We better make it WORK FOR US.
However, the banks may be providing is some amount of Interest within a specific period of time in Savings Account.
But the interest rates are too low here & the tax is to be deducted each time anyways when the SALARY OF YOUR JOB is transferred to your account.
Won't say you can escape taxes completely but atleast you acn keep some amount of it with you.
— You may Invest & Grow your money in SHARE MARKET, BONDS, REAL ESTATE, MUTUAL FUNDS, etc. etc.
These assets won't really want you to work as hard as your job & it won't be something which'll pay you very low.... like ofcourse there is risk.... but if you invest correctly then it doesn't requires much time but you've gotta do the research for that.... however, you can always hire a Stock Broker for picking stocks & there are many Real Estate experts out there & Mutual Funds is a really good i
Investment for those who don't like taking Risk!
What about opening a mall at a busy street or any such place & getting paid each month from the rent of the shops!
So from from Assets you'll keep on receiving money each month. Generating profit!
& from that profit you may get more into Assets.
I don't think having just a Million Dollars makes you Rich.... instead if your able to keep on making money every damn time possible then you are Rich!
Because if the flow of money which comes into your Bank Account every seconds doesn't stop.... then you can spend & earn.... spend & earn.... It's Stability of teh Rich!
Whereas a Million Dollars at rest will be wiped up soon!
So it's always better to have multiple ways to make money!
& with this we complete what Assets basically are & some examples of them.
Let us come to Liabilities now....
As we know that, "Anything that takes money out of your pocket is known as a Liability!"
Well now, it's not like you should just leave everything there & not purchase something & STARVE.
Like— NO. That's not what it means & how it works!
You know the NECESSARY expenses are not at all bad.
But the UNNECESSARY one's are!
This further is extended to EXPENSES which are there in the Income Statement.
I would not hesitate to let y'all know more about the "STATEMENTS" & how the Cash Flows into these Statements & with this we'll understand how to Manage Money!
So basically there are 2 main things which I'll refer toward as "Statements".... one is the "Income Statement", having the column of "Income" on one hand & the column of "Expenses" on the other.
While teh other Statement is the "Balance Sheet", having one column of "Assets" & the oter one of "Liabilities".
Robert T. Kiyosaki explains that the Cash Flows through the 2 Statements (Income Statement & Balance Sheet) covering all teh four (Income, Expenses, Assets & Liabilities).
— But there are certain differences between tehe Rich, Middle Class & teh Poor's Portfolio/Cash Flow Statement (the way cash flows through the Statements covering all 4).
It is fun understanding about all these with the graphs provided in the book....
Let us also try understanding with the help of the Graphs!
So here we go,
A common mistake, the poor make is that— As soon as they get a raise in the salary.... then they tend to spend more then they used to....!
You see as soon as tehre income goes up there expenses goes up as well.
This is so called known as the trap of the Rat Race.... & the poor are now stuck in this!
So these were all graphs & all given in the book.... It doesn't require any further explanations as per of the one's provided in the graphs, already pretty much explains everything.
Ok so now as I promised.... I'll now give y'all an apps link & after downloading that from Google Play Store Y'all Can Read The Book— Rich Dad Poor Dad, FOR FREE!
& just to let y'all know that I am not promoting that app.... You know I'm not at all SPONSORING IT.
I just found that app & thought of letting y'all know 'bout that.... So that y'all can read the book— Rich Dad Poor Dad, FOR FREE.
I hope that you all will enjoy reading the book— Rich Dad Poor Dad.
So that's all for today!
Thanks For Reading!
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