This morning, I was running a bit behind schedule.  I was about to fill up my morning coffee for the day, and then I stopped.

The other day a friend was showing me how to change a two prong wall outlet to three.  During the conversation, he talked about the difference between DC and AC power.  He said that with DC power, energy is charged with the intent to deplete the stored power.  But, with AC power it is a constant current passing through both the neutral and hot wires.

Mentally, I was brought back to that conversation as I was about to make my coffee, and compared my charging up with caffeine for the day to the DC power.  I also thought of the inevitable lull in energy that later occurs equating with the depletion of DC power.

Then, I thought if I decide to have juice and oatmeal with the intent of health and balance it could be compared to AC power.  I pictured this as setting the stage for balance in the body allowing for “power” to pass through, rather than the need to charge up as in DC power.

I am re-thinking how to start my day thanks to that conversation while installing the three prong wall outlets.  Have you felt the need to “charge up” before starting your day or an activity?  Could intent of balance instead be another answer, allowing the body to accomplish in it’s most natural state rather than the need for an additional charge?  What do you think?

See Robert Kiyosaki and his advisors live in Scottsdale, Arizona either in person or live streaming on October 14th!

Scheduling would not permit me to attend the live event, but I just signed up for live streaming.  Both the live event, and streaming are EXTREMELY reasonable in price.

Check out the link below!

Financial education through the Rich Dad message continues to inspire throughout Europe!  Ron Salvador recently lead this CASHFLOW event in Gdańsk, Poland.  Please enjoy the pics below!

Thanks Ron and Michał!

Pictures courtesy of Michał Stencel in Koscierzyna, Poland

Ron Salvador is leading CASHFLOW Club Leader training on his European tour, most recently in Warsaw, Poland!  Feel free to check out the pics below, courtesy of Piotr J. Kober who is a CASHFLOW Club Leader in Warsaw, Poland.

Ron, thanks for our training session in March and you are a continuing inspiration for our club in Portland, OR!

Yesterday and today could both be categorized as “one of those days.”  Yesterday, I tried to pay the electric bill online, and to my surprise found that my online account seemed to no longer exist.   After waiting on hold for an extended time was able to recreate the account.  Then, went to pay the bill, and this account didn’t seem to want to accept my credit card.  I had to call the company that they use for payments, and they told me I had to call my the financial institution, as the problem supposedly was on their end.  Lord knows how much time was spent, but for a $60 payment, I had to get off this crazy train.

On this same day, a membership site that I canceled well within the specified notice still ended up billing me for the next cycle for $27.  I called and e-mailed, and am still waiting for confirmation of a refund this morning.

Today, I was charged twice as much as I anticipated from another monthly service.  Because I did not read the fine print, they said there is nothing they can do, and is non-refundable due to their policy.  But, they encouraged me to enjoy the service that I paid for during the allotted amount of time of the coming billing cycle.

I could go on, but I think you get the message about the kind of days these have been.  Have you ever had those days that seem to suck the life out of you?

One of the benefits of regularly attending a CASHFLOW Club, is that meetings are structured to have the opposite effect as described above.  It is meant to recharge with positive energy, in searching for solutions throughout the game, and mutual support through positive reinforcement.

Yesterday, I lead a CASHFLOW game, and was very inspired by the “lights that came on” when a player internalized a concept learned from playing the game, and group discussion at the end.  It brightened my entire day!

I am also a martial artist, and one of the rules that we honor is when you salute into the training area, you leave whatever problems outside the door, and come in with a fresh perspective.  If a person would like to re-engage with those problems at the end of the session when they salute out of the training floor, the choice is available.  But, frequently what happens is that after the training session, one has either gained new perspective or the negative energy has been dissipated to a more manageable level through letting go for that short time.  The community of people of like mind and seeking positive solutions in a CASHFLOW Club can be invaluable, and very similar to the policy of “saluting in” as described above.

If you would like more information regarding attending our club, or any other Rich Dad CASHFLOW Club, feel free to e-mail us at the contact information listed in our “About” page.  Enjoy!

Students played CASHFLOW 101 for the first time at Everest College in Portland, Oregon!  Everyone had a great time today, feel free to check out the pics below.  Thanks for a great job playing the game to the students, and to all for stopping by the website.  Enjoy!

John, a truck driver and his wife Sandra who is a part-time nurse have 2 young children.  Between the mortgage, car payments, daycare since they both work, credit card debt, and other miscellaneous costs, monthly expenses are about $3500.  They had been able to keep up with the payments, and had $5000 in savings.

After 15 years of working for the company, John was then notified that they were downsizing, and he had 2 weeks notice.  He was devastated because of the state of the economy, jobs being so scarce, and that he was the main wage earner for the family.  He had been investing in his 401(k), but in following the popular advice of keeping all of his money in the account even when the mutual funds were plummeting, he lost everything.

Two months went by, and still could not find work.  Even with unemployment checks coming in, savings were almost gone.  Their home equity line of credit was maxed out, and his bank would not lend any more.  He was looking at having to sell the house or face foreclosure.  But, nobody was buying real estate, because the banks just were not lending with the state of the economy.  How did everything that seemed like it was going so well, get so bad?  What went wrong?

How would this situation have been different if they had passive income coming in every month from positive cash flowing rental property, or a side business?

Can anyone learn to invest?  Will you invest differently at 47 than at 18 years old?  If you invest primarily for cash flow rather than capital gains (buy low and sell high), the strategy will be the same for both age groups.  The only difference will be the one that starts at 18 years old will have the advantage of time.

When investing for cash flow, money comes in every month from acquired assets.  Remember, from the previous post, assets put money in your pocket.  Liabilities take money from your pocket.

There are many ways to get started in acquiring and creating assets.  Information products sold on the internet are extremely cost-effective to create, and can provide passive income.  For example, if you write an eBook, it costs nothing but your time, and can bring infinite returns if a proper marketing strategy is used.

Other examples of assets you can create utilizing the internet are becoming an affiliate marketer (where you sell other people’s products for commission), writing a song, patents, trademarks, membership websites, recurring commissions from products, and drop-ship e-commerce.

Another business with low start-up cost is network marketing.  The main strategy is to get a strong down-line that are selling for you, and you are providing good up-line support.

Real estate investing can be an excellent choice as well, though proper training is recommended.  As you saw from the last post, one major advantage is that passive income from real estate, if done strategically, can be taxed at 0 %, legally!

The investment plan is this.  Whatever money you invest in your assets, including further return on the investment, you re-invest, no exceptions.  This is where time becomes your friend rather than your enemy.  The more money you make from assets, the more there is to re-invest in new assets.

At 58, 18, or any age, there is no reason not to start.  With discipline and dedication, one can begin the path of attaining passive income within a short amount of time.

What is the effect of having one’s monthly passive income exceed their monthly expenses?

The question to a child seems innocent enough, right?  Firefighter, policeman, airline pilot, doctor, lawyer are all answers that could come up.  Investor, business owner – maybe not so common!

Where the problem lies is in the expectation of the answer.  So often, the answer involves only being an employee.  It is very commendable to be an employee and part of a team.  The question is whether that is the only choice, and the early imprinting regarding the child’s influence.

“The CASHFLOW Quadrant”, by Robert Kiyosaki offers further distinction in how one earns revenue, and also suggests that these distinctions can be combined.

Robert defines these areas into four quadrants, and also how each pays tax expenses.  The left side of the Quadrant, he describes as E (Employee) and S (Self-employed); and, the right side as B (Big Business) and I (Investor).

On the left side, the E and S will end up paying about 50% or more in taxes when all is said and done.  E’s are the hard-working folks working for companies or the state.  S’s are specialists like doctors, lawyers, and, solo businesses.

On the right side of the quadrant are B’s which are bigger businesses owners utilizing teams, and I’s which are investors.  Typically, B’s leverage other people’s time; and, I’s leverage other people’s money.  The tax for portfolio income like stocks, and capital gains is about 20%.  The tax for an investor including real estate is 0%, no tax if done strategically (and legally!)

In their purest form, each quadrant can be characterized by certain ways of thinking.  E’s are often looking for a safe, secure job with benefits.  S’s are often solo types that might include the dialog, “If you want it done right, do it yourself.”  S’s are also often required to be the smartest in the room.  This is the basis for which they are often contracted for work.

B’s are looking for people that are smarter than they are in various areas to include in a team.  Again, they are seeking to leverage other people’s talents and time spent.  I’s will put their money to work by investing in businesses and real estate, so that they don’t have to spend time working for money.

What we suggest in playing the CASHFLOW GAME is that the quadrants can be combined, as well as the reasons for inclusion in each quadrant.  For example, I can start investing and seeking passive income while I am an employee, say as a fireman, and am interested in rental properties.  Let’s say I am just starting and I have one rental property where the mortgage is $1000 for a 2 bedroom / 1 bath.  I charge $1400 for the rental property, hire a property manager, and still have money left over every month.  The money after expenses is cash flowing in every month whether I work or not at my job.  I can then take out another mortgage from that property, and re-invest that money into another rental property on a 1031 Exchange within the tax deadline required and continue this cycle so that I never pay any taxes – legally.

After I receive enough passive income to meet my monthly expenses, I can choose to work or not for my own reasons.  I believe in the cause of saving lives as a fireman, so I continue to work because I love my work.  But, I am not dependant on the income to meet expenses.

Below are four videos where Robert Kiyosaki explains further the points described above, as well as other related definitions.

In the first video below, he defines the CASHFLOW Quadrant.

In this video, Robert explains tax expense in relation to each quadrant.

In this next video, Robert very clearly defines what he considers the difference between an asset and a liability. This distinction is absolutely imperative to understanding Robert’s approach and path to financial freedom.

This last video explains the difference between what Robert calls “Good Debt” and “Bad Debt.” Good debt is debt that makes you richer, and bad debt makes your poor.

An example of good debt is where you have a positive cash flowing rental property as described above. Bad debt examples include things like credit card debt paying off items that do not produce positive cash flow like big screen televisions and stereos, or car payments. Buying some of these toys described as bad debt can be ok, but one might consider being sure that there is enough positive cash flow (passive income) to cover those expenses.

What answers will you encourage a child to answer when asked what they want to be when they grow up?

Remember back in school when you were asked a question out loud in front of the class?  What was your feeling?  I hope I give the right answer, and am not humiliated by making a mistake – if you had a school experience like many of us!

One of the most important guidelines of an official CASHFLOW Club is that we encourage experimentation and mistakes during the CASHFLOW game.  We feel that it is important that the member learn through experience, and other members not spoon-feed the answers.

The word education comes from the Latin word, educare, which means to draw out.  So often, at school we crammed information into our heads for a test, then forgot the information soon after.  We feel that information gained through experience – both successes and mistakes, will be retained to a much greater degree.  Would you rather make a mistake playing the CASHFLOW game with play money, or when real money is on the line? Robert explains in the video below, the importance of learning involving more participation and the result of increased retention, in contrast with only reading or a more passive approach.

Another important characteristic of an official CASHFLOW Club is that Rich Dad Company requests that we do not allow selling at the game, or it must be very clear that a product will be promoted in advance.  We feel that this clear boundary allows for unhindered learning and participation, in a supportive environment progressing toward further financial freedom. Feel free to watch the video below for further explanation from Robert and Kim Kiyosaki.

The two guidelines described above are integral parts of the training that official club leaders receive, and that members can expect when attending official CASHFLOW Club games.

Looking forward to playing together soon!

Have you begun your study of how to get out of the rat race, but are feeling overwhelmed at all the areas that need to be addressed?  What is the first action step?

Rich Dad Company offers a free web site offering step by step information with tremendous written content, and video training.  Robert is able to take complex subjects as accounting and investing, and present them in a way that is easy to understand.  Feel free to click on the link below for specific information regarding the Rich Dad PowerPack.

Two action steps that I would recommend if you are considering attending a Rich Dad CASHFLOW Club are to get the Rich Dad PowerPack described above, and to start playing the Cashflow The Web Game online for free.

Congratulations for taking action in your journey of financial freedom!

February 2018
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