You can buy happiness if you know where to shop.
Almost every other person on this planet is in some or the other debt and is irritated because of it. Why worry about someone else, we ourselves are in some or the other debts and badly want to get rid of it.
The biggest problem that obstructs in reaching the debt free life is the lack of financial education. People are in debts and are not able to get over it, because of the economic structure we have. By the time we are about to clear the debts, we are in need to spend on something new. That will become a source of debt and the cycle goes on and on and on, forever.
Obviously, we cannot get rid of all our debts by doing this but we can find a way to do away with the debts. Reason? There are ways to get rid of them, the right way and you’d be flabbergasted to see the results.
Where does our money go?
Well, this is something we’d be thinking all this while. At the beginning of the month, we get our paycheck but within a week we are left with nothing to spend on. Ever wondered why?
The financial system is built on two principles,
- Take money before you earn it
- Give products/service before you spend money to buy.
Now, in the first principle, you are at the center and the service providers like ISP, mobile operators, banks, government, and all such smart minds are the one who are desperately waiting for you to get your pay check so that they can fill their pockets.
This is is many to one, i.e. many payers paying to one- hence making them richer every month.
In the second principle, they are playing a mind game by giving you their products/service prior payment so that they gain the trust of you, and they gain money of yours.
What did you get?
A product or service that will start becoming worthless from the very next moment you get it.
What did they get?
Money – And I’ve never seen money losing its value over time.
Who’s winning? And how to get over this?
Understand the financial system
The whole financial system is divided into two quadrants
But dude, what are these terms? Explain it to me as if I’m five…
An asset is something that puts money in your pocket. Eg: Your house on rent to someone, business, real estate etc.
Liability is something that takes money from our pocket. Eg: Your own house, Jobs, expensive cars, and mobiles.
What’s liability for us, is an asset to some. Now, do you understand where does your money go?
If I had to bifurcate the classes of our society based on financial status, it would be coming down to the fact that
- Poor have expenses
- Middle class have liability
- Rich has assets
There’s nothing wrong in having a job, Sundar Pichai and Satya Nadella are employees of big shots and they are doing brilliantly well. But you and I are not at that position, so at our level, a job is nothing but a source of expenses. Take your payslip and see how much of our hard earned money is going to rich governments as TAX. If at all you have a job, make sure you have assets building so that you can quit your job and rely on it for paying your bills.
Furthermore, I need not break the nut to explain how frustrating a job is – Do I?
How to become RICH- Rich Dad Poor Dad style
In his book, Rich Dad Poor Dad – Robert Kiyosaki explains a key method of becoming rich. He also explains to what you earn goes to returnable assets and not liabilities which make you look rich and not actually make you rich like assets do.
Rich Dad Poor Dad has got him the best seller award soon after its release. The book primarily focuses on Recursive Income – Which means investing the profit/savings back to the business and hence making a broader chance on making more profit, bigger than you invested.
No matter what job you’re in, out of choice or not it is really important to spend time on building assets so that you can happily rely on them in future. You may have to quit your job due to the recession or any other factor, but you’d never quit your assets in such situation.
It is perfectly fine to opt for a job, but it is equally important to not settle there forever. Keep building assets from day one, the job will take care of your bills and you take care of your assets. Once you have acquired enough assets, you don’t need a job anymore. It is this smooth transition that opens the door to your riches.
Many people are skeptical about going for owning a business, mentioning the risks and fear of going out dated and never do they hesitate in buying that expensive smart phone which would be worthless in a month or so. It is really important for all of us to know the difference between “How much money I make” and “How much money I keep”
If I make $7000 a month and I spend $6999 a month, wouldn’t I stupid to say that I make $7000 a month. I am actually making $1 a month, rest of my income is resting in someone else’s account. So how do I say it’s my money? I earn for someone else – Brutal truth.
The key learning from the book Rich Dad Poor Dad is that you can operate from the asset quadrant and pay up to 0% as tax, which helps you keep all your hard earned money. The reason why rich get richer every passing year is the fact that they are too smart to be let the government rob their hard earned money.
Robert Kiyosaki deserves the best seller award for his work in Rich Dad Poor Dad. One of the best things I loved reading this book was the cash flow of the poor, middle class and the rich. The poor get income and loses all the money in expenses, the middle class gets income and loses a huge part of the money in expenses and liabilities. This is the reason, why there’s no much difference between Poor and middle class.
The Rich gets income and spends to build assets and the profit from the assets is used for their expenses. By this way, they are not only building multiple assets so that they get more profit but they are also becoming richer and richer day by day.
So if you and I want to become rich, we know what are we lacking- Assets. Assets will make you rich faster than your job can.
Over to you, what was the best thing you liked about this post? Do you spend money and time on assets? Either way leave you views in the comments below, it can b a simple “Hi” we’d love talking to you.
Do you know someone who’d be benefitted by this post? Share this with them and let us all eliminate the reason to be helpless financially.