Be financially literate.
Robert kiyosaki suggest that you have to know accounts. These are numbers right? You have to know how to read a balance sheet, income statement etc.
In that way, you are well informed in as far as where your money is going and what amount is coming in. It can be a bit boring to learn these concepts but in the long run, it saves you a lot of money.
You have to understand also other issues surrounding your money for example taxes,,, how much are you being taxed,, what can you do to avoid these taxes or reduce them.(this will be covered in our following lessons).
The other issue is investing,,,,what is investing. You will be surprised to find out that the definition of investing we use everyday is different from what it is in actuality. You have to know when to invest, what to invest and how to invest.
Financial literacy helps you to keep your money as well as well as make more money. Remember this is the goal,, this is what makes you rich. That is why we see that a person who wins a lot of money 3 or so years later,they are broke again. Its because they are not financially literate. They didn’t pay attention to where their money was going.
Someone once said that if we take all the money in the world and share it equally among everyone, few years later the money will be back in the same few hands. You know why??? .yesss because these are the same people who are financially literate . They know how to make money, they know how to keep it and they know how to multiply it.
Lastly and most importantly is the fact that to be financially literate, you have to know the difference between an asset and a liability. According to kiyosaki, an asset is something that brings in money while a liability is something that takes away money.
This is quite clear right?? Now take a good look at your kombis, your car , your house, your property etc, are they bringing in more income or taking away money from you…..
Now hear the most interesting part. The rich people buy assets and the poor people buy liabilities
This is what makes them rich and Richer. Because their assets bring more money.
Now go back to what you called your assets,,,are they really assets. Things like a house and a car can be debated as both an asset and a liability. Now here’s the take away fact: if the cost of upkeep or maintenance is higher than the amount that your house or car is bringing in,, then that house and or car is not an asset but rather a liability yes you got it ryt.
Now let’s go back together on the things you said are your assets, are they really assets??? If they are ,then congratulations, you are steps away from being rich. Now make your assets big enough to grow by themselves. That income which is being brought in by your asset, use it to buy another asset and another. Watch your money grow and multiply.