RICH GET RICHER

YOU MUST KNOW THE DIFFERENCE BETWEEN ASSETS AND LIABILITES.
Buy assets. If you want to be rich, this is all you need to know. It is Rule No.1 and it is the only rule. This may sound absurdly simple, but most people have no idea how profound this rule is. Most people struggle financially because they do not know the difference between an asset and a liability.
“RICH PEOPLE ACQUIRE ASSESTS. THE POOR AND MIDDLE CLASS ACQUIRE LIABILITIES, BUT THEY THING THEY ARE ASSETS.”
Now the question is what are these two words, assets and liabilities?
Here it goes…
There are the cash flow patterns for the rich and the poor, middle class. Cash flow is the source of income and the expenses.

INCOME                          ASSET

EXPENSE                          LAIBILITY

These four words are all you need to take care in your cash flow.
• Cash flow of rich.
INCOME   ↑           ←        ASSETS ↑
EXPENSE  ↓                       LIABILITY

Here, the thing is, the asset increases the income and it is also going to be a constant income source. Simultaneously, there is also an income we earn. So, the flow works with the manner decreasing the expenses and increasing the income.

• Cash flow of poor, middle class.

INCOME   ↓                     ASSETS
EXPENSE  ↑                     LIABILITY ↑

Here, the expense increases, as liability increases and the income is less as there’s only one source of income and that’s earning via job.
Now, taking rich into the consideration, the cash flow is as follows:
INCOME   ↑           ←        ASSETS ↑
EXPENSE  ↓ 

ASSETS INCLUDE :
• STOCKS
• BONDS
• NOTES
• REAL ESTATES
• INTELLECTUAL PROPERTY
Now, taking middle class into consideration, the cash flow is as follows.

INCOME   ↓(JOB)                     ASSETS
EXPENSE  ↑                     LIABILITY ↑

LIABILITY INCLUDES:
• MORTGAGE
• CONSUMERS
• CREDIT CARDS

EXPENSES INCLUDE:
• TAXES
• MORTGAGE
• FIXED EXPENSE
• FOOD
• CLOTHING
• FUN




Now, taking poor and young into consideration, the cash flow is as follows:

INCOME   ↓ (JOB)                    ASSETS
EXPENSE  ↑                     LIABILITY

EXPENSES INCLUDE:
• TAXES
• MORTGAGE
• FIXED EXPENSE
• FOOD
• CLOTHING
• FUN



POOR DAD FINANCIAL STATEMENT
INCOME: LES                     ASSET: ABSENT
EXPENSE: MORE                LIABILITY

RICH DAD FINANCIAL STATEMENT
INCOME: HIGH                 ASSETS: PRESENT
EXPENSE: LESS                  LIABILITY

WHY THE RICH GET RICHER?
INCOME   ↑ ↑     ←        ASSETS ↑ ↑
EXPENSE  ↓                       LIABILITY ↓

As this reinvestment process continues, we are on our way to become rich. The actual definition of rich is in the eye of a beholder. You can never be too rich. Just remember the simple observation: The rich buy asset.   The poor only have expenses. The middle class buys liability they think are asset.


Inspired by RICH DAD POOR DAD.