RICH DAD POOR DAD | S5 – E48 | LESSON VIII | 10 STEPS TO DEVELOP YOUR POWERS #5 pAY yoURSELF fIRST

If you cannot get control of yourself, do not try to get rich. It makes no sense to invest, make money, and blow it. It is the lack of self-discipline that causes most lottery winners to go broke soon after winning millions. It is the lack of self-discipline that causes people who get a raise to immediately go out and buy a new car or take a cruise.

It is difficult to say which of the 10 steps is the most important. But of all the steps, this step is probably the most difficult to master if it is not already a part of your makeup. I would venture to say that personal self-discipline is the number-one delineating factor between the rich, the poor, and the middle class.

Simply put, people who have low self-esteem and low tolerance for financial pressure can never be rich. As I have said, a lesson learned from my rich dad was that the world will push you around. The world pushes people around, not because other people are bullies, but because the individual lacks internal control and discipline. People who lack internal fortitude often become victims of those who have self-discipline.

Rich Dad Poor Dad | S5 – E12 | Assets vs. Liabilities | What’s Your Cash-flow Pattern?

Are you a poor, middle, or rich cash-flow possessing individual?

Well, let me try to break this down in blog form. If you want the amazing podcast, make sure you scroll down to the bottom for it.

Cash-flow of a poor person

Your job gives you your salary, which then goes to your expenses: taxes, food, transportation, clothes, etc. That’s all you have. You have zero assets, and fortunately, you have zero liabilities.

Cash-flow of a middle-class person

Your job gives you your salary, but instead of going to expenses, it goes down to your balance sheet in the category titled “liabilities.” This has your mortgage, car loans, credit card loan debt, school loans, etc. After you pay for your liabilities, then the remaining money goes back to your expenses: taxes, etc.

Cash-flow of The Rich

You do not have a job or salary. Better yet, your money starts in your balance sheet in the assets category which has real estate, stocks, bonds, notes, intellectual property. Those assets never get paid with liabilities. In fact, it goes back up to your income statement, which is the rental income, dividends, interest, and royalties. The only monthly expenses you have are taxes and a possible mortgage payment.

Which one are you?

Podcast

Rich Dad Poor Dad | S5 – E11 | Assets vs. Liabilities | Cash-flow Pattern of an Asset

Rich dad believed in the KISS principle—Keep It Simple, Stupid (or Keep It Super Simple)—so he kept it simple for us, and that made our financial foundation strong.

So what causes the confusion? How could something so simple be so screwed up? Why would someone buy an asset that was really a liability? The answer is found in basic education.

We focus on the word “literacy” and not “financial literacy.” What defines something to be an asset or a liability are not words. In fact, if you really want to be confused, look up the words “asset”

Rich Dad Poor Dad

An asset puts money in my pocket. A liability takes money out of my pocket.

and “liability” in the dictionary. I know the definition may sound good to a trained accountant, but for the average person, it makes no sense. But we adults are often too proud to admit that something does not make sense.

To us young boys, rich dad said, “What defines an asset are not words, but numbers. And if you can’t read the numbers, you can’t tell an asset from a hole in the ground.” “In accounting,” rich dad would say, “it’s not the numbers, but what the numbers are telling you. It’s just like words. It’s not the words, but the story the words are telling you.”

“If you want to be rich, you’ve got to read and understand numbers.” If I heard that once, I heard it a thousand times from my rich dad. And I also heard, “The rich acquire assets, and the poor and middle class acquire liabilities.”

Here is how to tell the difference between an asset and a liability. Most accountants and financial professionals do not agree with
the definitions, but these simple drawings were the start of strong financial foundations for two young boys.

Lisa Nichols – Financial Readiness Assessment

This assessment is simply finding out where you are right now and where you want to be in the future.  A lot of people aren’t aware of a lot of things including spending, savings, debt, etc. So this assessment and the podcasts I have linked at the bottom for you to listen to will face you in the right direction in terms of your financially abundant future.

This assessment is graded on a scale 1-10.  1 being the absolute worse and 10 having a clear understand where you are in the category.  It’s kind of like the wheel of life exercise that I do from time-to-time (monthly to track my happiness).  If you drop below 5 in any category, don’t beat yourself up.  Be bluntly honest and don’t say, “well, I’ve never done that before.”  Rate yourself where you are and be honest with yourself.  I will post the questions and link my podcast down below so you could have a listen in terms of the explanations of each question.

QUESTION 1:
“I HAVE A CLEAR, WRITTEN, WORKING BUSINESS PLAN OR PERSONAL LIFE PLAN.”

QUESTION 2:
“I USE A FINANCIAL TRACKING SYSTEM SUCH AS QUICKBOOKS FOR MY BUSINESS OR QUICKEN/MINT ONLINE FOR MY PERSONAL FINANCES.”

QUESTION 3:
“I HAVE AND FOLLOW CLEAR FINANCIAL GOALS—DAILY, WEEKLY, MONTHLY, AND YEARLY.”

QUESTION 4:
“I KNOW HOW MUCH MONEY I NEED TO SAVE AND INVEST TO ACHIEVE FINANCIAL ABUNDANCE.”

QUESTION 5:
“I KNOW MY MONTHLY BUDGET AND I STICK TO IT.”

QUESTION 6:
“I TRACK MY PRODUCTIVITY AND EITHER RAISE MY PRICES BASED ON MY ABILITY TO PRODUCE—OR HAVE ASKED FOR A PROMOTION AND RAISE AT WORK BASED ON MY INCREASED SKILL SET AND HIGH PRODUCTIVITY.”

QUESTION 7:
“I AM COMFORTABLE WITH THE AMOUNT OF DEBT I HAVE.”

QUESTION 8:
“I CARRY NO HIGH-INTEREST DEBT.”

QUESTION 9:
“I UNDERSTAND THE DIFFERENCE BETWEEN GOOD DEBT AND BAD DEBT.”

QUESTION 10:
“I KNOW THE DOLLAR AMOUNT NEEDED TO MEET MY MONTHLY BUDGET, AND I’VE GOT A ‘COMMUNITY’ THAT HELPS ME ACHIEVE THAT.”

Excerpt From: Lisa Nichols & Janet Switzer. “Abundance Now.”

Now, with that being done and you writing down everything, what was your score? And now the action steps to take yourself to the next level and create cash flow….

Podcasts 

Will be more than excited to hear everyone’s story!  You know how to reach me!