Robert Kiyosaki has built his career around simplifying complex information on personal finance. He continues to defy regular wisdom and asks the questions that will help readers. Kiyosaki believes that a strong foundation needs to start with solid, true intelligence. Rich Dad realised funds were venomous. They’re designed to steal the affluence of anyone who manufactures for cash.
Therefore, once seeing what the government was up too, rich dad came up with his lesson #1, which is: “The affluent do not work for money.”
Subsequently, in 1997 Kiyosaki shared his rich dad’s advice with the world in the book, “Rich Dad Poor Dad.” In that book, He shared truths like the following: Your house is not an asset. Savers are losers. The rich do not work for money. In that book, he shared his rich dad’s simple formula for assets versus liabilities.
“A plus puts cash in your pocket,” said rich dad. Incidentally, the simple definition of a fake asset is one that promises to make you richer, but it robs you blind.
“A liability takes cash out of your pocket,” rich dad continued.
Your Super/401(k) could be faux a result of money keeps flowing out of your pocket… for years. Therefore, an Individual Retirement Account, or IRA, is a fake asset because it takes money out of your pocket… for years. Government pension could be a fake asset which is a result of taking cash out of your pocket… for years.
A house that you live in is a fake asset. It is taking money out of your pocket in the form of a mortgage for 30 or more years. In addition, you also have to pay for all the repairs and taxes, out of pocket. A mutual fund is a fake asset. For example, stocks, bonds, ETFs, and savings. are fake assets as well They are all derivatives. Mutual funds come with fees, fees that make the rich richer. And you poorer. Mutual fund investors put up 100 percent of the money, and take 100 percent of the risk. Incidentally, they gain less than 20 percent of the profits. Remember: Assets put money in your pocket. Liabilities take money from your pocket.
Getting a real asset
However. by following this simple formula, you can always tell the difference between a fake and a real asset. Incidentally, Your superannuation/401K gave birth to an entire industry of so-called financial planners. They’re trained to sell paper assets like stocks, bonds, and mutual funds for a commission. To be clear, these are not investments. They are products that banks, the governments, ASX and Wall Street need to sell to become wealthy.
They do so through fees, and they prop up growth by selling more products. If that sounds like a Ponzi scheme to you, you’re on to something. The wealthy don’t invest in fake assets and that they don’t work for cash. Rather they know the rules of the game now that money is debt. Their financial knowledge helps them invest in real assets. Financial education will help stop giving your cash to the wealthy through fake assets.
You’ll then invest in real assets that provide cash flow and understand the following: · How to use taxes to get assets. · How to use debt to get assets. · How to reinvest gains without paying taxes. · Why it makes sense to save gold and silver, not fake money. Soon, you too will be able to invest like the rich and spot fake assets when you see them…and invest in real assets like a pro.
By Brett Slater 27.06.2019