If you’ve read many of my posts, you’re probably already aware of my love for the book Rich Dad Poor Dad by Robert Kiyosaki. I truly believe that the way we think has more influence in becoming successful and wealthy than the skills we possess. From the day I began reading this book my focus and way of thinking regarding money changed.
This change in thought was not only concerning how I earn income, but also what I do with it. These are basic principles that may seem elementary to many readers, but they will change your life if you put them into action. Below are the five principles that changed my financial future:
In a very simple form, assets are anything that creates cash flow for you, while liabilities are anything that requires money every month to keep them. A great example of an asset would be rental properties, while a liability would be a car. One way that I keep this principle is that I will not buy a new car until I have an asset that pays for the liability.
Passive income is any income you make without having to work daily to earn it.
People spend their entire young lives going to school to be qualified for a job that pays them a nice salary. These same people will spend very little time educating themselves on what to do with the money they earn. Becoming wealthy has as much to do with knowing what to do with money as it does the amount of your earned income.
The more streams of income you have the less you risk losing your income. Similar to diversifying in your investments, I like to diversify in my income. For example I have the following streams of income:
As you can see, I have worked very hard to create passive income streams. All of these are passive with the exception of the buying and selling of homes and new construction.
Once you increase your passive income to the point that you can live with freedom you can buy the things you have always wanted without effecting your assets and ability to gain more wealth.
I could not have gotten to where I am financially without implementing these principles. When you begin to put these techniques into practice you will build the kind of wealth that brings a lifestyle of freedom.
I want to hear from you! Which of these principles do you currently practice and how have they impacted your wealth building ability? Click here to leave a reply.