Increasing Your Wealth by Increasing Your Financial Literacy

Perhaps the primary message of Rich Dad, Poor Dad is increasing basic financial literacy. Perhaps I should state financial literacy for the common adult male and woman. The ground I state this is because the rules taught in the book are very simple--the cardinal personal finance. Some people may even state the what Kiyosaki learns is dangerously simplistic.

I believe those people are missing the point. While it is true that if you desire to construct important wealth, you will need to analyze finance and business in greater depth, what I believe that "Rich Dad, Poor Dad" and "Cash Flow Quadrant" learns well is a high degree position of how cash flows through your life. And one of the first things you must do in order to get accumulating wealthiness is to understand and take charge of your cash flow.

Once you understand how you make cash and understand the flow, you can get to make simple to complex changes to collect more than than and more cashflows. And just like H2O that flows into a glass gets to accumulate, your wealthiness will lift and eventually overflow with abundance.

Here are some of the cardinal points about financial literacy in the "Rich Dad" book:

1) Your top "wealth" is not money. It is your state of mind, your thought and understanding--proper (not necessarily conventional) education. Once you learn how to do a batch of money, even if person takes it all away, you still have got the knowledge to re-create it and more. Even more than important, if you have got profound financial knowledge, there is much less opportunity that you will ever lose it once you make it. The lesson: put your clip and your money studying how to do positive watercourses of inactive cash flow.

2) It's not only how much money you make, it's how much you keep. As cash flow come ups in, you have got to be argus-eyed not to pass it as fast or faster than you do it. Path and control your finances.

3) Understand the difference between assets and liabilities. This is one of the most controversial points in the book. According to Kiyosaki, an plus sets cash in your pocket, a liability takes out cash from your pocket. These are not academically rectify definitions, but they are very helpful in getting control of your cash flow.

4) In order to be rich, collect assets. Most people get into financial problem by accumulating liabilities (especially credit card debt). The most common ground this haps is owed to a deficiency of understanding, deficiency of intelligence of what is happening to their cash flow pattern.

5) If you collect a batch of money, but make not have got the intelligence to understand how to effectively manage your cash flow, an addition in money can actually accelerate the problem. 6) Here is one point that I'm calm wrestling with: your home is not an asset. It may be an plus on your balance sheet, but because it is taking money out of your pocket, it is a liability. He's not saying don't purchase a home. He's saying don't name it an plus when it is really a liability.

7) When you are in the procedure of edifice your wealth, exercising financial subject to maximise what you pass on cash producing assets and minimise what you pass on cash draining liabilities. Economy is not adequate if you are not buying cash producing assets.

8) One point that is emphasized more than in his game Cash Flow (highest recommendation) is his definition of a "doodad." I absolutely love this term, because it interrupts your purchasing pattern and assists you take control of your disbursement habits. Doodads are those stuff ownerships that we pass our money on that are really liabilities. Like that extravagance car that is really beyond your current means. Or that new telecasting set that you just had to have. Or as simple as that new DVD. Buying dodads at the clip you should be purchasing assets is the 1 of the primary causes of financial trouble.

9) He is not saying don't purchase doodads. The point is to purchase assets before you purchase doodads. And then allow the extra income that is generated by the assets pay for your doodads. Put first things first.

10) The poor, center class, and affluent all pass money. Where they eventually stop up depends on the the intelligence and wisdom they develop and what they take to accumulate. What you concentrate your ideas on expands. If you concentrate on increasing your knowledge and assets, they will accumulate. If you concentrate on dohickeys and indiscriminate disbursement (even unconsciously), you will collect liabilities.

So, what are some Power Affirmations to assist status your head to automatically move on these ideas? One thing I trust you will detect about these affirmations: many of these are very specific. They travel manner beyond such as cliches as "I love myself."

When I make and usage affirmations, I'm interested in focusing on specific strategies and thought patterns I need to have got in order to accomplish my objective. When was the last clip you saw an affirmation that included tax accountants and bankers? But the truth is you need these people on your squad if you are going to construct monolithic wealth. So you may as well status your head that they will be in your life, that you are comfy in dealing with them, and that they work for you.

Here are the new affirmations:

1) My financial intelligence is now multiplying everyday.

2) I am the master of my money. I track and manage my cash flows.

3) I carefully collect cash producing assets.

4) I pay myself first. And I utilize the cash I salvage to purchase more than than and more assets.

5) I now environ myself with expert financial advisors: tax accountants, existent estate brokers, bankers, attorneys, and investors. Outstanding advisors now work for me.

6) I analyze and fully understand financial statements. When I analyze financial statements, I rapidly understand the cash flow patterns behind the numbers.

7) I now have got an outstanding balance sheet rich with cash producing assets.

8) When I pass money, I minimise dohickeys and maximise assets.

9) I clearly understand the difference between assets and liabilities.

10) When I do a purchase, I inquire myself "am I turning cash into trash, or into cash producing assets?" I take assets.

11) My cash producing assets now transcend my personal disbursals and purchase more than cash creating assets. I am now on the fast path of life.

One last point. As good as the "Rich Dad, Poor Dad" book is, Henry Martin Robert Kiyosaki's game "Cashflow" really helped clear up the most of import concepts. I utilize the computing machine version. Given my clip restraints with my business, I happen it easier to put aside clip to play it periodically. Even though it is a simplistic position of how the human race works, and is heavily biased towards existent estate, I establish it extremely educational. As a side note, Iodine majored in business in college, but there is very small I learned from my courses of study that I experience increased my financial intelligence. That have come up primarily from studying books like "Rich Dad, Poor Dad," and "Think and Turn Rich." Bash not underestimate the powerfulness of self education!!!