Rich Dad Lessons: Mind your own business
Based on Kiyosaki’s work
When the financial freedom is looked for, it is important to understand that the possibilities to reach it are reduced if we spend our time by minding the somebody else’s business. When we make it, we will probably be helping to enrich somebody else, while we trade our most important resource for money: the time.
We should learn how to mind our own business, because if we spend all the time minding the somebody else’s business, our financial statements will list our salary or the money that somebody pays us to make a specific activity or provide a specific service as the only income stream.
Most people are exactly in that position. And it is not necessarily bad. But the problems begin when we are tied to a consumption society which seduces us to spend out until the last cent we earn to live as slaves of a salary or a job. It is what is called the rat race. That is to say, the expenses eat up the incomes totally, and people sometimes spend even more than what they earn, by getting in debt with an indefinite quantity of bad debts.
Those debts correspond to some liabilities that are also expenses eating away at the incomes to such a point that a lot of people end up working for their banker or creditors although their daily activities correspond to a job that doesn’t have anything to do with the financial sector. It means, although they have a boss, and it is supposed they work for that boss, they really spend their time working to get money that finally will end up in the pockets of the bank.
But the worst thing is the impossibility of building assets when you are in this situation. In the rat race. The assets are the wealth source. If your only asset is your job or the house where you live, let me tell you this: you have absolutely no assets. Without assets it is very difficult to achieve financial freedom. I would say it’s impossible, at least in the capitalist world. Remember the assets are generally those that put money in your pocket, in a passive way. That is to say, you don’t have to constantly work and with your physical presence so the money flows. For that reason, I tell you your job cannot be an asset.
Act now! You need to begin to build your assets if you have none yet. Everything begins with a plan. There are some points here to begin:
1 - Elaborate your current personal financial statements. Write all the monthly revenues you have down, including your salary, rents or any type of passive income at the moment. And also, write all your monthly expenses down without forgetting anything. Then make the balance sheet among assets (they put money in your pocket every month) and liabilities (they take money out of your pocket every month). When you have done this, visualize your situation and establish the adjustments you should make.
2- Establish your financial goals. Define not only where you want to be financially in 5 years, but also you must establish where you want to be in 12 months. Your short-term goals are an intermediate step for your long-term goals.
3 - With their established goals, elaborate the financial statements you will have in 5 years if you end up completing the established goals.
With this information, we have enough mental fuel to move ourselves financially toward where we want to be. Now, we only need to act and perseverance. Go ahead!
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