Rich Dad Poor Dad | S5 – E15 | Many Financial Problems are Caused by Keeping Up with The Joneses

No, this isn’t the Gary Vee rant. This is what Robert Kiyosaki wrote in his book decades ago.

That is why my educated dad said the Japanese valued the power of the mirror the most, for it is only when we look into it that we find truth. Fear is the main reason that people say, “Play it safe.” That goes for anything, be it sports, relationships, careers, or money. It is that same fear, the fear of ostracism, that causes people to conform to, and not question, commonly accepted opinions or popular trends: “Your home is an asset.” “Get a bill-consolidation loan, and get out of debt.” “Work harder.” “It’s a promotion.” “Someday I’ll be a vice president.” “Save money.” “When I get a raise, I’ll buy us a bigger house.” “Mutual funds are safe.”

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Rich Dad says “home is a liability.”

Poor Dad says “home is an asset.”

I remember when I drew the following diagram for my dad showing him the direction of cash flow. I also showed him the ancillary expenses that went along with owning the home. A bigger home meant bigger expenses, and the cash flow kept going out through the expense column.

Home as an asset can only be an asset if it’s real-estate. If it’s not real estate, you’re not getting rental income from it; therefore, you’re living in the house.

Also, with a mortgage comes monthly expenses such as property tax, maintenance and utilities.

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  • When it comes to houses, most people work all their lives paying for a home they never own. In other words, most people buy a new house every few years, each time incurring a new 30-year loan to pay off the previous one.
  • Even though people receive a tax deduction for interest on mortgage payments, they pay for all their other expenses with after-tax dollars, even after they pay off their mortgage.
  • My wife’s parents were shocked when the property taxes on their home increased to $1,000 a month. This was after they had retired, so the increase put a strain on their retirement budget, and they felt forced to move.
  • Houses do not always go up in value. I have friends who owe a million dollars for a home that today would sell for far less.
  • The greatest losses of all are those from missed opportunities. If all your money is tied up in your house, you may be forced to work harder because your money continues blowing
    out of the expense column, instead of adding to the asset column—the classic middle-class cash-flow pattern. If a young couple would put more money into their asset column early on, their later years would be easier. Their assets would have grown and would be available to help cover expenses. All too often, a house only serves as a vehicle for incurring a home-equity loan to pay for mounting expenses.

Rich Dad Poor Dad | S5 – E13 | Understanding | Get Rich Quick? TERRIBLE Decision

The reason I started with the story of the richest men in America
is to illustrate the flaw in believing that money will solve all problems. That is why I cringe whenever I hear people ask me how to get rich quicker, or where they should start. I often hear, “I’m in debt, so I need to make more money.”

Rich Dad Poor Dad

But more money will often not solve the problem. In fact, it may compound the problem. Money often makes obvious our tragic human

Cash flow tells the story of how a person handles money.

flaws, putting a spotlight on what we don’t know. That is why, all too often, a person who comes into a sudden windfall of cash—let’s say an inheritance, a pay raise, or lottery winnings—soon returns to the same financial mess, if not worse, than the mess they were in before. Money only accentuates the cash-flow pattern running in your head. If your pattern is to spend everything you get, most likely an increase in cash will just result in an increase in spending. Thus, the saying, “A fool and his money is one big party.”

Today, doctors face financial challenges I wouldn’t wish on my worst enemy: insurance companies taking control of the business, managed health care, government intervention, and malpractice suits. Today, kids want to be famous athletes, movie stars, rock stars, beauty queens, or CEOs because that is where the fame, money, and prestige are. That is the reason it is so hard to motivate kids in school today.

They know that professional success is no longer solely linked to academic success, as it once was.

Because students leave school without financial skills, millions
of educated people pursue their profession successfully, but later find themselves struggling financially.
They work harder but don’t get ahead. What is missing from their education is not how to make money, but how to manage money. It’s called financial aptitude—what you do with the money once you make it, how to keep people from taking it from you, how to keep it longer, and how to make that money work hard for you. Most people don’t understand why they struggle financially because they don’t understand cash flow. A person can be highly educated, professionally successful, and financially illiterate. These people often work harder than they need to because they learned how to work hard, but not how to have their money work hard for them.

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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.

Rich Dad Poor Dad | S5 – E10 | The Broken American School System

Our school system, created in the Agrarian Age, still believes in homes with no foundation. Dirt floors are still the rage. So kids graduate from school with virtually no financial foundation. One day, sleepless and deep in debt in suburbia, living the American Dream, they decide that the answer to their financial problems is to find a way to get rich quick.

Construction on the skyscraper begins. It goes up quickly, and soon, instead of the Empire State Building, we have the Leaning Tower of Suburbia. The sleepless nights return.

As for Mike and me in our adult years, both of our choices were possible because we were taught to pour a strong financial foundation when we were just kids.

Accounting is possibly the most confusing, boring subject in the world, but if you want to be rich long-term, it could be the most important subject. For rich dad, the question was how to take a boring and confusing subject and teach it to kids. The answer he found was to make it simple by teaching it in pictures.

My rich dad poured a strong financial foundation for Mike and me. Since we were just kids, he created a simple way to teach us.

For years he only drew pictures and used few words. Mike and I understood the simple drawings, the jargon, the movement of money,

Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.

and then in later years, rich dad began adding numbers. Today, Mike has gone on to master much more complex and sophisticated accounting analysis because he had to in order to run his empire. I am not as sophisticated because my empire is smaller, yet we come from the same simple foundation. Over the following pages, I offer to you the same simple line drawings Mike’s dad created for us. Though basic, those drawings helped guide two little boys in building great sums of wealth on a solid and deep foundation.

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Stephen Covey’s Speed of Trust: Season 4 – Episode 23 – The Final ‘S’ in Tasks

The biggest questions of a lifetime for business owners. You know, I was thinking about the time Jack Ma had to fire employees because of the problems he was having with Ali Baba. Through what Napoleon Hill has said, “Applied Faith,” he was able to see things through and work his way out of the rut, making a billion (and soon-to-be trillion) dollar empire. Here are your questions.

The biggest questions of a lifetime for business owners. You know, I was thinking about the time Jack Ma had to fire employees because of the problems he was having with Ali Baba. Through what Napoleon Hill has said, “Applied Faith,” he was able to see things through and work his way out of the rut, making a billion (and soon-to-be trillion) dollar empire. Here are your questions.

  • How effective is your current style in approaching problems and opportunities and interacting with others?
  • Does your approaching facilitate or get in the way of accomplishing what needs to be done?
  • What can you do to improve the way in which you go about doing things?

Lots of ideas came to mind about how well I handle situations. Room for improvement is wide-open, and I need to start feeling things gaps ASAP.

I can get considerably better when it comes to approaching problems. Example, there was an issue at an old job whereas a guy called me out in a number of ways. I shouldn’t have taken that lightly, and even more, I could’ve forwarded the emails and voice messages he had sent me to the owner. Regardless, because he’s white in a very pro-white country, he would’ve gotten a free-pass. But allowing people to get away with unruly behavior is even worse.

When it comes to interacting with others, I’m almost certain that I do an incredible job in that area because that’s one of my strongest points. I pick up energy signals very easily, and this is very important because if people come to me with jobs, I should be able to point them in the right direction of a good teacher, rather than one that would just tarnish my reputation.

An example would be a new employee (or new ones every week) at my job on the weekend. It’s none of my business, but because I’m good at picking up energy, there’s one specific new teacher that has “HORRIBLE” written all over him. If you guys listened/read my blogs from early last year, you’ll know exactly what I’m talking about. I don’t give a second look or anything to these teachers. I don’t introduce myself because they’ve been the bane of my existence here. If they’re not someone who has ideas or anything, why even bother? Most of them complain or say some very sick things that pertains to under-age girls (yeah, welcome to Thailand). So, OQP (Only Quality People).

That’s in the world of business.

When it comes to my entrepreneurial world, I can seriously learn to get better at appropriating time slots for when I should be on social media. I feel if I leave notifications on all day, I can lose maybe 1-1.5 hours. So, as of today, I’ve turned them off and they’ve helped me considerably. The only messages I receive are of importance from my graphic designer. Facebook messages in the morning while commuting (anytime while commuting) is enough. Other apps at the same time. No FB at home or during my core hours.

This is how you can identify what’s working and what isn’t….so I suggest all of you do the same with the questions above!

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Stephen Covey’s Speed of Trust: Season 4 – Episode 6 – The Four Cores

Guys welcome back to another Stephen Covey blog/podcast, and today is a follow up from what we’ve already done with the questionnaire (last week). 

So, each part in the questionnaire corresponds to one of the “4 Cores of Credibility.”  These are the foundational elements that make you believable, both ot yourself and to others. 

So, when it comes to integrity, it basically means honesty.  It’s walking your talk.  Do you live up to your values and beliefs? Or do you do opposite of what you say. 

Core 2: Intent

The second core deals with issues of intent.  This has to do with our motives, our agendas, and our resulting behavior.  Trust grows when our motives are straightforward and based on mutual benefit — in other words, when we genuinely care not only for ourselves, but also for the people we interact with, lead, or serve.  When we suspect a hidden agenda from someone or we don’t believe they are acting in our best interests, we are suspicious about everything they say and do. 

Both integrity and intent are matters of character.

Stephen Covey’s Speed of Trust

This happens a lot in my life because I have a tendency of always saying to myself, “is this real?”  Came across a lady on the street last night and she was super friendly.  It didn’t make any sense, and I truly believed that she had a hidden agenda. She was trying to exploit me somehow, someway, and I was right. 

Core 3: Capabilities

The third core deals with issues of capabilities.  These are the abilities that have inspire confidence — our talens, attitudes, skills, knowledge, and style.  They are the means we use to produce results.  A family doctor might have integrity and his motives might be good, but unless he’s trained and skilled to perform the task at hand (brain surgery, for example) he’ll be lacking in credibility in that area.  Capabilities also deal with our ability to establish, grow, extend, and restore trust. 

Stephen Covey’s Speed of Trust

Core 4: Results

The fourth core deals with issues around results.  This refers to our track record, our performance, our getting the right things done.  If we don’t accomplish what we are expected to do, it diminishes our credibility.  On the other hand, when we achieve the results we promised, we establish a positive reputation of performing, of being a produce, and our reputation precedes us. 

Stephen Covey’s Speed of Trust

And these are the cores.  Remember, everyone, each area is of equal importance.  Example, someone who has great integrity, good intent and a great track record my lack capabilities.  Another person who has great integrity, capable and produces excellent results may have selfishness and doesn’t care about you.  

In any case, you won’t fully trust that person in any situation. So, in order to visualize the importance of all cores is by through the metaphor of a tree.  Integrity is the root of the tree which everything else grows.  Intent becomes more visible after you establish the character, which is just below the soil.  It’s essentially the big trunk the pokes its head out.  The capabilities are the branches and the capacities that enable us to produce.  Results are the fruits.  

So, with the being said, we’re going to have to start going through the cores

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Ramble of Positivity: Episode XXI – On The Brink

Wow.  It’s been a magnificent ride with lots of bumps and bruises along the way (also known as Character Building Moments). I’m very grateful for having the opportunity to teach in that particular area of Bangkok and develop the skills needed to get me to this juncture.

You know, I kind of question myself sometimes though.  The ‘if,’ right?  It’s like when things started going soar two years ago – I did nothing in terms of job-searching or looking outside the box.  However, that was the moment I needed to get out and pursue greater things.  It’s very unfortunate that I had a situation occur that was beyond head-scratching that made be realize, “Arsenio, time to go!”

And so, here we are! A remarkable mentor, who has more than 30 years of IELTS (test-prep course) teaching experience, grabbed me and put me under his wing.  In just 20 minutes, I learned more than I did the previous 2.5 years.  YIKES! That’s the fine line between someone who cares and loves what he does versus people who are here based on obligation.

On the eve of my new life, I’m so grateful to look back and said, “god damn! Well that was interesting!” From the very beginning, to having opportunities teaching big time corporations.  My growth was stunted and hampered, especially after the changing of a head teacher.  I never asked myself, “why am I here? Am I learning or dying?” I wish I did, but it brought me to a very enticing juncture in my life.  The suspense of the future is no longer killing me, and now I have complete control over the “now.”

I’ve now committed to 1-hour of learning everyday, too.  Whether it’s on podcasts, YouTube, or reading.  Just this morning I was able to learn for about 1.5 hours (commuting).  That ‘so-called’ downtime could be used for learning, and so now I’m very adamant with getting a daily dose of REAL education in my system on a routine basis.

I’ve shut off the past, which has been really slowing me down and clogging up my attention units.  Everything that has happened over the years are now archived and will be talked about in a future Tedx in a form of inspiration.  That is all!

And now on the cusp of a very enticing race (Spartan Sprint in Kuala Lumpur), and now me hustling and grinding in terms of my next step, I’ve now ripped apart the shackles that had me paralyzed for so long and faced the fear.

However, that fear is freedom.

THANK YOU!

For all the supporters who read my blogs from Spain, to Mexico, then shooting all the way east the motherland continent of Africa.  I’m grateful for all of you!

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