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Rich Dad Poor Dad - PowerPoint

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									   The Consumer Economy and
       “Rich Dad. Poor Dad.”


 What The Wealthy Teach Their Kids
            About Money
That The Poor And Middle Class Don’t.
               The Consumer Economy

• Continuous growth through continuous consumption.
• Most of us define ourselves in terms of:
   – How much and what we consume.
   – Our role in the making of what we consume.
   – Our ability to persuade others to consume.
• Its philosophy is spreading throughout the world.
• Is it truly satisfying?
• “If your reason for becoming rich is to look rich, you
  will never become rich.”
                The Consumer Economy

• We are a free country, not necessarily a fair
  country. We are all free to fail.
• We’re being taught to be “Good Employees.”
  –   Go to school
  –   Get good grades
  –   Get a good “JOB”
  –   Work hard
  –   Maintain good credit
  –   So we can consume lots of stuff.
• “JOB” for most means “Just Over Broke.”
• Should we be taught how to become “Wealthy?”
Most of the following ideas about money and wealth creation
are From Robert Kiyosaki and his partner and co-author,
Sharon Lechter. I highly recommend that study their writings
more deeply on your own.
                Financial Intelligence

• It is not your boss’ job to make you wealthy or
  secure. It’s her job to give you a paycheck . . .
  nothing more.
• Making more money will not solve your
  problem if money management is your problem.
• Money is a drug.
                  Financial Intelligence

• Money pushes you around. You will obey
  money.
  –   Employers/Bosses
  –   Landlords
  –   Bill collectors
  –   Tax collectors
  –   Family and friends
• Can you push back?
• Are you smarter than your money?
• Answer: Do you work for money, or does
  money work for you?
                    Financial Intelligence

• When money works for you, every dollar is an
  employee. Each dollar works to bring you even
  more dollars while you’re asleep.
  – Passive Income: Interest, dividends, real estate
    income, royalties, residuals, annuities
• Your money can work for you or it most
  certainly will work for someone else.
• “What do you do?” versus “What do you own?”
  – The key is “What investments do you own that will
    bring you passive income?”
                       Financial Intelligence
• “Being Rich” versus “Being Wealthy”
• Being Rich is about how much money you possess in a
  specific moment in time.
• Being Wealthy is about . . .
   – how much money you keep
   – how hard it works for you
   – how much is left for future generations (who know what to do
     with it)
• Being Wealthy is about exploding your Passive Income.
  (How long you can survive without ever having to go to
  work?)
                  Financial Intelligence
       Rich Dad. Poor Dad’s Basic Philosophy



• Know the difference between an ASSET and a
  LIABILITY, and only buy assets.
  – A True Asset gives a positive cash flow each and
    every month.
• Live below your means, while constantly
  increasing your means.
• Make your PASSIVE INCOME cover your
  Lifestyle Expenses forever.
                     Financial Literacy


• Sadly, most of us have been taught to read
  words and books, but not numbers and
  financial statements.
• Two key personal and business financial
  statements we all must be able to read.
  – The Income Statement shows the amount of
    money coming in and going out.
  – The Balance Sheet shows the balance of what
    you own and what you owe.
            Financial Literacy (continued)

              Income

Income
Statement      Expenses (Payments)



          Assets (Own)   Liabilities (Debts)
Balance
Sheet
            Financial Literacy (continued)

              Income
              Paycheck, dividends, interest,
Income        rents, royalties, profits, advances
Statement      Expenses (Payments)



          Assets (Own)       Liabilities (Debts)
Balance
Sheet
            Financial Literacy (continued)

             Income
             Paycheck, dividends, interest,
Income       rents, royalties, profits, advances
Statement    Expenses (Payments)
             Taxes, mortgage/rent, cards,
             car, food, fun, rent, clothes,
             child care, insurance, medical
          Assets (Own)        Liabilities (Debts)
Balance
Sheet
            Financial Literacy (continued)

               Income
               Paycheck, dividends, interest,
Income         rents, royalties, profits, advances
Statement      Expenses (Payments)
                Taxes, mortgage/rent, cards,
                car, food, fun, rent, clothes,
                child care, insurance, medical
          Assets (Own)        Liabilities (Debts)
Balance                        Mortgage, car
Sheet                          loan, credit cards,
                               school loans
              Financial Literacy (continued)

                  Income
                 Paycheck, dividends, interest,
Income           rents, royalties, profits, advances
Statement         Expenses (Payments)
                  Taxes, mortgage/rent, cards,
                  car, food, fun, rent, clothes,
                  child care, insurance, medical
          Assets (Own)          Liabilities (Debt)
Balance   Stocks, bonds, notes, Mortgage, car
Sheet     real estate, business, loan, credit cards,
          intellectual property school loans
                           How The Poor Live
 They only have small incomes and small expenses



               Income
Income
Statement      Expenses

Balance
Sheet       Assets = Zero Liabilities = Zero
                            How The Poor Live
They only have small incomes and small expenses



                Income
Income
Statement       Expenses           $
                                                   The
                                                  Wealthy

Balance
            Assets = Zero    Liabilities = Zero
Sheet
                How The Middle Class Live
They buy expenses and liabilities they think are assets



                  Income
 Income
 Statement       Expenses



 Balance                    Liabilities
 Sheet
              Assets
             Assets
                How The Middle Class Live
They buy expenses and liabilities they think are assets



                 Income
 Income
 Statement       Expenses                      The
                             $                Wealthy



 Balance                    Liabilities
 Sheet
              Assets
             Assets
                     How The Wealthy Live
     They take the income of the poor and middle
  class, and buy assets that produce more income


               Income
Income
Statement
               Expenses


Balance     Assets
Sheet                     Liabilities
                       How The Wealthy Live
They take the income of the poor and middle class,
         and buy assets that produce more income


                 Income
                                    $       Poor and
                                           middle class
  Income                                     income
  Statement
                 Expenses


 Balance      Assets
 Sheet                       Liabilities
              Rich Dad’s
Cash Flow Quadrant (modified)


                     Note: Kiyosaki calls the D
                     Quadrant the “Big Business
                     Owner” Quadrant.
              Rich Dad’s
Cash Flow Quadrant (modified)
                         Rich Dad’s
           Cash Flow Quadrant (modified)


You have a job.
Someone else is the boss.
Security before money.
          Exempt vs Non-Exempt Jobs

• Management/Exempt               • Non-Exempt
  – Considered a professional       – Considered non-professional
  – At least 50% of time            – Up to 100% doing routine,
    using intellect, directing,       non-thinking tasks
    creativity
                                    – Does only what is told to do
  – Has discretion with
    decisions                       – Has a pre-set schedule
  – Sets own work schedule          – Punches a time clock
  – Receives a salary               – Paid hourly
  – No overtime pay                 – Receives overtime pay
                           Rich Dad’s
             Cash Flow Quadrant (modified)


  You have a job.
  Someone else is the boss.
  Security before money.




You own a job. Loner/”boss.”
Perfectionists. Small bus.
owners: Drs. Restaurateurs.
Independence before money.
                            Rich Dad’s
              Cash Flow Quadrant (modified)


  You have a job.              You own a system that others operate.
  Someone else is the boss.    Coordinator. Delegator. Franchiser.
  Security before money.       Use other people's time and money.




You own a job. Loner/”boss.”
Perfectionists. Small bus.
owners: Drs. Restaurateurs.
Independence before money.
                            Rich Dad’s
              Cash Flow Quadrant (modified)


  You have a job.              You own a system that others operate.
  Someone else is the boss.    Coordinator. Delegator. Franchiser.
  Security before money.       Use other people's time and money.




You own a job. Loner/”boss.”    Your money works for you.
Perfectionists. Small bus.      Make money with money.
Owners: Drs., restaurateurs.    Other’s liabilities are your assets.
Independence before money.
              Rich Dad’s
Cash Flow Quadrant (modified)
                         Rich Dad’s
           Cash Flow Quadrant (modified)




Rat        Job Security     Financial Freedom
                                                 Wealth
Race                                             Side
Side


       Financial Security   Ultimate Financial
                            Freedom
 Sample Paths To Financial Freedom




           Start
Rat                           Wealth
Race                          Side
Side


           or        End
           Start
 Sample Paths To Financial Freedom




           Start
Rat                           Wealth
Race                          Side
Side

                     End
 Sample Paths To Financial Freedom




                     Start
Rat                           Wealth
Race                          Side
Side

                     End
In Which Quadrant Are You Headed?

  • What are your financial goals?
  • Which would you choose?
    – Job security
    – Financial security
    – Financial freedom
Systems and Discipline Are The Key
                For All Quadrants

  • “Am I hauling buckets or building a
    pipeline?”
  • Can you make a better hamburger than
    McDonald’s? Can you build a better system
    for making hamburgers than McDonald’s?
  • There are tons of great ideas, but few great
    systems.
  • You must also have the discipline to diligently
    work the system.
 Some Final Thoughts
• Risk
  – It’s risky not to build a business or not to invest.
  – 9 out of 10 business fail; so I need to fail 9 times.
• Money
  – There are two problems associated with money: You
    can have too little or too much.
  – Money comes from inside out, not the outside in.
  – So, money is an idea, not a thing. Thus, your ideas
    can create money out of nothing.
  – You create money in your spare time. Creating ideas
    and searching for bargain assets.
  – It’s not how much money you make; it’s about how
    much you keep.
Some Final Thoughts (continued)
• Emotional Intelligence
  – Practice “delayed gratification.”
  – Buy assets first, luxuries last.
  – Ask “how can I afford it?” This stimulates your
    creativity.
Some Books and Stuff by Robert Kiyosaki
                   and Sharon Lechter


•   Rich Dad. Poor Dad.
•   Cashflow Quadrant
•   Cashflow Game
•   Cashflow, The E-Game
•   Rich Dad’s Guide to Investing
•   Retire Young. Retire Rich.
•   Rich Kid. Smart Kid.

								
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