A book review of cash flow in the stock market


I still wanted to learn more winning options to add to my arsenal. When I was at the MPH bookstore, I saw a Rich Dad Advisors book called “Cash Flow in the Stock Market” by Andy Tanner. I remembered that Robert Kiyosaki always emphasized that cash flow in any investment is comparable to capital gains. I decided to turn the book over to find the gems. I bought the book only on a second look after discovering that I could learn and practice some of the concepts taught.
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To become a great investor, we have to be a great student to learn all about investing to become an expert. I first became acquainted with two systems of learning measurement; 1) The educational continuum helps us measure how well we have mastered and applied the concepts of our financial education. Levels – ignorance, awareness, competence and skill. 2) The learning cone, developed by Edgar Dale, shows the extent to which we maintain different ways of learning, whether active or passive learning. With these two measurement systems we can measure how good a student we have invested.
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Andy introduces us to four major asset classes. These are business, real estate, commodities and paper assets. He conducted a good comparison of the different asset classes so that everyone could assess which asset class was most appropriate given their circumstances. Since this book is about paper assets, Andy gave a few more reasons why an investor should consider having paper assets in their investment portfolio.

Next Andy presents his 4 basics of investing. The next 4 sections sink deep into each pillar. Personally, I find these 4 pillars very useful and guide the investor, no matter what level he is at, to make better decisions. 4 pillars:

· Column 1 – Fundamental analysis

· Column 2 – Technical Analysis

· Pillar 3 – Cash flow

· Pillar 4 – Risk Management

Fundamental analysis allows an investor to determine the strength and value of an entity (sovereign, corporate, personal) by understanding its financial statements. Basically, what the financial report will look like for each business entity is governed by the implemented policy. Policies need to change to change the fundamentals. One of the best investors of our time, Warren Buffett, is a guru in determining the fundamentals of any company. Gurus like him have many important fundamental factors to look at whether companies should invest. His company Berkshire Hathaway has implemented an excellent policy through which his company has achieved tremendous growth and exponential growth in his company’s stock prices. Andy provided similar ratios (and definitions) for investors to make stock comparisons. I find them really useful and used in my stock analysis.

Technical analysis helps investors determine market strength based on supply and demand when prices move. The stock chart is used by investors to find out if there is a trend created by historical price movements. This trend or pattern, determined by the investor, will tell him about the likelihood of stock movements. Andy gave a pretty good introduction to technical analysis, explaining basic fundamentals such as trend types, support and resistance, and several commonly used chart patterns. I have found that this is all you need to do for any investor if he is really knowledgeable in them.

Cash flow helps the investor better position himself in the market. Andy uses the concept of options to illustrate this point, and emphasizes the possibility of how this tool allows the investor to make a profit in any market direction. Andy explains the many properties of an option contract. Understanding the basics of a call put and a combination of both options allows the investor to have many ways to position themselves in the market.

Risk management teaches us three ways to deal with risk: 1) avoid risk 2) take risk 3) manage risk. Risk is related to control. An investor who is more in control of their investments will be less at risk. The same is true if the investor has less control over their investment and will have more risk. Those who have no control are gamblers. It is also wise to know the maximum risk when investing.

How we find ourselves in the future depends on the choices we make today and on who we surround ourselves with. How good students we are today will determine our financial future.

I really enjoyed this book because Andy is a great teacher who very simply explains these concepts. This allows me to better understand and preserve what is being taught. Hopefully you will get a copy of his book and be enlightened.



An in-depth review of the book conspiracy of the rich!


Have you ever thought that for the rich there are different rules than for the poor and middle class? If this thought has ever occurred to you, then The Conspiracy of the Rich is the book for you.
However, this book is not just a collection of speculative opinions, but a story that includes the time frame of the economic collapse. This leads to several cases of financial trouble, including 2008, when the Great Recession was called ..

The book begins with an overview of the current US President and his support staff. The author brilliantly raises the question “who really has the power of President Obama or Chairman of the Federal Reserve Ben Bernanke”?
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The authors ’message is clear and concise that without financial education you are eating out of the hands of conspirators. It even goes so far as to prove how our current economic crisis is stemming from our education system.
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By reading the book, you may even question your belief in what is sacred and what is considered financial.
Like the authors ’first book,“ Rich Dad, ”“ Poor Dad, ”this book is an educational gold mine from start to finish. While many authors only note that the bad guys are purely manic and evil, Robert gives another twist. Its purpose is not to blame, but to make clear the reasoning of the richest and wealthiest people in the world.
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It also distinguishes this book from how simply Robert solves complex financial issues. The term derivative has acquired a whole new meaning when it is discussed by the author. Another twist you will find in this book is your worldview of the world economy. Why the world hopes for America’s recovery, the author points out how America never tackled the problems of the first Great Depression.
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One of the most fascinating aspects of the book is his view of what he calls the “New Rules of Money”. The “new rules of money,” as he explains, can benefit not only the rich but also those who find time to learn how to act using those rules.
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Everyone who reads this book will be forced to change their views on money, government and business. In a world where so much is thought about what will come, this book points to solutions. The author concludes the book with a call to action that is needed in a world full of guilt.
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Did you consider studying bankruptcy your profession?


Here are some agencies that can help you someday help those in need.
The American Bankruptcy Institute offers lawyers and financial professionals a wealth of knowledge when it comes to rising trends, the causes of bankruptcy and any changes in legislation that the public – and lawyers – need to know to make the bankruptcy process as successful as possible.
There are online courses
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There are also online classes that you can take advantage of as a bankruptcy specialist so you can effectively help your clients when it comes to explaining the difference between sections 7 and 13, or help a client choose section 11 over a section. 13 bankruptcy.
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Lenders and appraisers are part of this organization, which means that if you file for bankruptcy, you can deal with a lender who will most likely know your financial situation.
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Bankruptcy judges also belong to the American Bankruptcy Institute, which means that these legal professionals strive to be aware of the financial changes in the country to better serve you.

Once you have filed for bankruptcy, or even if you are seriously considering it, you can also go to bankruptcy school to learn the skills needed to recover finances.
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Classes will teach you how to set short-term and long-term goals, how to keep organized financial statements and how to have enough insurance coverage that can save a considerable amount of money in the future.
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You will learn how to use credit wisely

Using credit wisely is another lesson you will learn in school bankruptcy so that you can differentiate your needs and desires and avoid creating additional debt for yourself.

You can take these bankruptcy classes online or in person, depending on how you feel you will learn best. The registration fee is paid, but it is usually available (about $ 30).

If you and your attorney attended school of bankruptcy, you will probably have all the tools you need to successfully file and secure a financial future by sticking to a payout schedule and learning how to save money as well as spend money wisely. .

If you want to know how to enroll in bankruptcy school as a lawyer or a citizen in need of financial advice, their many online resources can be used.


Financial planning to achieve your future goals


We all plan a little to manage our income, savings, expenses, future obligations (money we expect to spend in the future), regardless of whether we understand anything about financial planning or not. As long as we can manage this well, maybe it’s not the best way to do it, or not the best results. While financial planning may sound technical, it all means how you recognize your future income and liabilities today, list current income and expenses, see if there is a gap between what you will need in the future and what you can get current funds with. and then plan your savings and investments to overcome this shortcoming.

List of current income and expenses:

Start with your current income, which should include your salary, the salary of other working family members, any other income such as rent, business income, etc. Add everything and be sure to also deduct the taxes you will pay from every income to finally come to your family’s net income now.

Once your family’s net income is received, deduct all expenses such as home expenses for the year, tuition fees, loan loans or any other short-term liabilities (expected over the next 3-5 years) that you envisage as home renovations or treatment etc. Post this deduction. The savings you get now are your savings that you need to invest wisely in the future.

Setting future life goals

The next step in financial planning should be to drop all your future financial obligations, the time when they will arise, the amount you will need, etc.

Goal 1A: For example, if you are 40 years old and you expect your daughter’s education to end in another 8 years and you estimate it could cost about 30 nail polishes, will you have the money to fund it? Decide on the investment and the amount you need to make today to achieve this goal, in 8 years.

Goal 2: Similarly, if you are going to retire at age 60, you need to say 1 nail polish per night to maintain your current lifestyle, which today is INR 50,000. Given the advances in health care, you can easily expect a life of retirement of 25 to 30 years. The money needed to live in retirement can be financed through long-term low-risk investments (such as loan mutual funds, retirement plans) made today. Set aside some money for such investments that need to be made today.

Goal 3A: You can allocate money to buy health insurance that you will need in retirement or even earlier. The insurance premium should be funded from your current savings.

The goal setting process helps to understand your future requirements, determine their number and make investments in the right asset class to fund each of the goals when they come up.

Asset allocation:

Although asset allocation can be accomplished along with goal setting, it is better to understand how asset allocation can affect the success of your financial plan. You can invest your savings in different asset classes such as equity, debt, gold, real estate, etc. Look at those investments you have already made, for example if you have an account in PPF or EPF, money that you have invested in bank deposits, home loans. payment, etc. From the current savings and investments you have already made, calculate the percentage of the distribution of funds for each asset class. For example, all bank deposits, amounts of government funding, government bonds, debt-oriented pension plans should be classified as debts. Any money invested in IPOs, company stocks, mutual funds should be classified as equity, EMI loans – as real estate, etc.

Generally, 100 minus your current age should be allocated to the stock and share-like product. If you are 40 years old, 60% of your annual savings need to be invested in product-like capital and on the balance in borrowed funds. If your current investments don’t seem to reflect this, try to balance your investments by reducing the money you invest in debt products such as software and bonds, and direct that money to mutual funds or stocks.

Most people are uncomfortable investing in stocks because they need special research, constant monitoring and a lot of unwarranted stress. Therefore, mutual funds are the best option because your money is professionally managed by fund managers who conduct all company research before investing and constantly monitor the fund’s activities by buying good shares and selling underperforming shares.

Start early

You need to start your financial planning early because it will give you the advantage of drawing up an example, whichever option you choose to invest, your money will grow over a longer period of time with profits made up each year.

Annual review and rebalancing

While a sound financial plan is a good starting point, it is important to follow it with discipline and rebuild your portfolio annually. Because life circumstances change frequently, you should review your plan with your financial advisor and make changes to reflect new circumstances.


5 reasons not to save in college is a good idea


Good. You caught me. Indeed, not saving from college from time to time is a bad idea. From time to time I come across parents who tell me they don’t skimp on college to increase the chances of their child getting financial aid. The view is that the availability of money allows colleges and the government to pay for tuition, so help is not needed. This is, to a limited extent, true. If you have millions in the bank, I prefer not to take tax dollars and not pay for your child’s college so you can spend money on first class tickets to Vale.

However, the notion that saving for college will ruin financial aid is short-sighted and makes many assumptions. The first is that your child will be provided with financial assistance. We don’t know which government will get help in 5, 10 or 15 years. You should also understand that most of the financial “help” goes in the form of loans. You are very good at creating a situation that makes it difficult for your children with heavy loans and they will find it difficult to return the money in exchange for a slightly better lifestyle. I wouldn’t call it smart financial planning.

Another reason that savings don’t hurt much when it comes to help is that the government knows you need to save more than just college. If you save on your own name rather than on your child’s (including 529 college savings plans and ESA Coverdell), less than 6% of the savings on these types of accounts will be credited to financial aid. Yes, it counts a bit with you, but not as much as a property in the name of a child of 20%.

There is a good reason not to save for college: you have more important needs for that money. Note, I’m not saying “if you can’t afford it”. This is because determining availability is often simplified to find out if there is money left at the end of the month. Most of us find ways to spend any available money. What we are spending on is perhaps a real life-giving need, but it may also be a dubious need.

So what can take precedence over savings in college? As a retiree, I enjoy seeing money at a time when you can no longer work. Of course, food, clothing and shelter are also provided for needs. But let’s face it: blue jeans can cost $ 20, $ 40, or more than $ 100. I think a couple of $ 100 is not considered a necessity.

After all, some people just won’t be able to afford to save in college without leaving a shortage in other vital areas. It’s not selfish, it’s just that. But for the rest of us, this is an area that deserves our attention.


Filing a bankruptcy case? Dealing with stress with facts


One of the reasons why many people in financial trouble are trying to avoid filing for bankruptcy is like a plague – lack of knowledge. In recent years, the U.S. has seen a large number of Americans filing for bankruptcy to settle debts, stop foreclosures and just get on their feet. Currently, the unemployment rate continues to be around 8%, and it seems that it will soon improve significantly. Many are knocking down the can because it continues to borrow as much money as their creditors allow. Now a large group of middle class borrows loans to pay off debts that they will never be able to repay. The average debt and middle class income ratio is now 154%. At some point in time only interest will force them into bankruptcy. They do nothing but rob Peter to pay Paul to continue his unsustainable lifestyle. U.S. citizens are not only playing with fire, but the government is experiencing a $ 1 trillion deficit and is poised to exceed $ 17 trillion next year. Ronald Reagan once compared the government to someone who spends money like a drunken sailor, but the only difference was that the sailor spends his own money.

For those who live this lifestyle and stressed that they are making a bankruptcy decision, he has to fight his fear and emphasize the facts about how their life will be after the bankruptcy is declared. Most people do not see themselves without plastic, and also believe that a bankruptcy application will take away from them this luxury. Although creditors would like debtors to believe that in the event of bankruptcy they will no longer have access to the golden goose, they are opportunists and see that employees who have gone bankrupt have virtually no debt. Typically, the same lender may take offense at that person, but there are thousands who are willing to take the risk.

Another thing that emphasizes people when considering bankruptcy is the ability of others to find out. Pride is a powerful emotion that makes people do stupid things, not even in their best interest. Out of pride many continue to throw good money into the debt abyss, knowing full well that debts will never be paid. Usually when a bankruptcy lawyer hears a client talk about how they would like not to throw away all that money and use bankruptcy much sooner. The reverse is always 2020, and if they had learned only the facts and not the rumors, they would still have all the money they threw away. First, those who are still worried, someone will find out they really have nothing to worry about unless that person is their creditor. When filing for bankruptcy, an individual should list all of their creditors, even family members and friends, if applicable. While this is a government record, if a person doesn’t tell someone, chances are no one will know. In general, it doesn’t really matter what others think when it comes to protecting your family’s financial future.

The final game is that lenders will no longer be able to contact the person, giving the person peace of mind, and allow them to answer their phone again. At the end of a bankruptcy declaration, many people come out with virtually no debt and get a fresh start, trying to avoid the mistakes of the past.


Lessons Learned from Bankruptcy


Even if you know that bankruptcy is the right choice, thinking about the long-term consequences you will face after deciding your case can be unpleasant. Most people look at their bankruptcy as something they never want to do again, but as a situation they have learned from. By dealing with such a debt in this way, you will surely gain wisdom that will help you in the future or even help your loved ones avoid the struggles you have gone through.


The budget will be part of your bankruptcy case and will become second nature after your debts will be taken care of. A bankruptcy attorney can help if they discuss your case, they will see how best to help your situation, and you will leave a complete list of tasks and documents that need to be completed. The next step before filing a case is you will need to take an online credit counseling course. This class will not only help you decide whether bankruptcy is the right choice for you, but a lot of attention in this class is also given to the budget. You also need a second class after submitting the documents to help you clarify your budget.

One of the most important things you can do to stick to your budget and plan your financial future is to know where your money is going. It is up to you not only to create your budget, but also to use the discipline needed in order to stick to your budget. You can make changes as your priorities change as long as you keep in mind that you only have so much money to work with. This can mean donating to one area to stockpile what you really want in another.


If you first file for bankruptcy, you will not have access to credit for some time, which can be a problem. That’s why it’s so important to focus on creating a savings account. This way, you will have money set aside for emergencies rather than accidentally borrowing again. If you find yourself in a situation where, for example, you are required to pay for medical services, work with a lender to make a payment plan rather than relying on credit cards.

Once you have the money to deal with emergencies, you can further manage your finances by accumulating money for important purchases or expenses. You will have the freedom to dream and plan without worrying about debt, even if the dream needs to be postponed a bit. With that in mind, it can be easier to give up small impulse purchases.

Planning for the future

Debt can reduce your freedom to live the life you really want. Instead of deciding where and how your money is spent, you are tied to debt payments. Bankruptcy can put an end to this stress and give you a fresh start. The lessons of credit recovery and budget life will benefit you for the rest of your life.


The effects of the financial crisis


The financial crisis is an ugly situation that no reasonable person would like to feel, because it leads to very drastic results that can reduce wealth and living standards. Unfortunately, recessions are sometimes unavoidable. Cases are inevitable as a result of poor government policies, unemployment and adverse economic conditions. The good news is that human beings can find a solution to any problem they face, so with hyperinflation, survival is still very possible.

In the past, the world’s leading countries have seen several economic downturns. Their decline affects other countries, especially those that depend on them for supplies of goods and services. Most recently, in 2008, America faced a similar situation, although the country is already making efforts to escape from it. If they don’t use the right procedures, perhaps they may witness a recession again. European countries are not exempt from this because countries such as Spain and Portugal are experiencing an unfavorable economic situation. Greece is almost unable to pay its debts, and Italy’s history is also disappointing. If the right steps are not taken soon, these problems may even get worse. Thus, the EU and the US government are considering different rescue plans and strategies to reform their economies.

One of the indicators of the recession is hyperinflation. Hyperinflation is a situation when prices for goods and services rise to unreasonable levels. The situation is usually caused by the deterioration of the currency. This is because the value of the currency depreciates, and those who receive a salary find it more difficult to buy products because they have risen in price. In most cases, people who do business usually do better than those who get paid because they can increase the prices of their goods and services. In fact, middle-class people face greater problems, as most of their earnings come from wages, and because their wages are not high, they cannot get what they want during hyperinflation. Another problem the middle class may face is that their savings will depreciate by the time they make money. At this time, interest rates on deposits are low, so people who have saved for years in the bank, will lose a lot of money.

Unfortunately, the economic recession lasts for several years, and government reform strategies can take years before results are obtained. The government may also face a problem among the population who cannot believe in its policies, even if it sounds great. Some governments are still exacerbating the situation by introducing the wrong policies. For example, printing fiat currency in large volumes will worsen the economy as it can cause inflation.

If inflation is caused by too much money in people’s hands, printing more notes is just a bad idea. Instead, the best strategy would be to cut money in people’s hands by implementing smart programs. Moreover, the government can raise interest rates to encourage people to do business, which in turn could cause economic recovery and growth.

If the right actions are not taken in time, people will lose faith in the government. Many people already view gold and silver as a smart way to invest, as their value rarely depreciates. Instead, their prices increase, especially when the value of the currency deteriorates. Silver is also a good choice and is an alternative to most people’s gold. People who don’t have as much money to invest in gold can invest in silver without fear of losing their money. Silver is also known for its industrial and technological applications.

When the economic recession is very severe, banks and the stock market work poorly. At such times, people can react aggressively and cause anarchy. Survival measures such as the accumulation of water and staple foods are increasing, and some people are even looking for defensive structures such as weapons to protect themselves when an alarm arises. In some other cases, people may relocate their reserves to other countries where they believe their investment will be safe.

The recession is ugly and that’s something you wouldn’t want to experience. It is necessary to pray that these problems never arise. In addition to prayers, it is also important to assist the government in implementing the right policies.


Drown in debt? Bring back your life!


Most Americans owe several thousand dollars of unsecured debt. The source of this debt problem comes from people who are constantly spending their budget. Soon they receive a living wage before payment of wages with redemption and return of vehicles only through a couple of salaries, if so far. Debt problems create tension in the home, family stress and can lead to divorce if left unresolved.

The only surefire way to eliminate debt is to change your perception of money and spending. You have to take the sea seal mentality on a secret mission to succeed. Financial companies earn millions of dollars from middle-class Americans and make a profit from those who can afford it the least over the years. The madness must stop.

To eliminate debt, look closely at your finances. Turn on the candy at the corner dressing. Add up everything you spend money on, and mark them for importance to you and your family.

Then take the bills. You know how much you spend on power, phones, entertainment, pizza on a Friday night. See how much money you can save by cutting these costs. Debt settlement requires some sacrifices. Marine seal, remember?

Save on gasoline costs by eliminating unnecessary trips to the store. Disconnect the cable / cookware. You need a monthly fee to pay the debt. Keep track of your electricity and water bills. Use only the minimum you need for life. Think sea seal. If you add up these savings, you can get the extra 50-200 per month that you just added to your income. This extra income will be your means of eliminating debt.

Now take the smallest debt you owe. How long have you been paying for it? Maybe too long and the finance company thanks you for being such a good customer! You have found your first victim in your debt settlement.

Take the extra income you found and apply it to the first account. Do this until the first bill shows zero balance. Do not deviate from your course. Don’t give up. Be persistent in your quest.

Once this bill no longer exists, sit down for a moment and rejoice in your victory. To achieve part of your goal you need a holiday to acknowledge the fact. Enjoy the magic words “Paid in full”. Give yourself a gift. Take your family out to a nice dinner. Buy yourself a new outfit! The idea of ​​rewarding yourself only fuels the desire to achieve your goal.

Take the money you no longer send to the first account and start applying it to the second debt – the next victim in the queue. Do this over and over until you become debt free. This concept works. You can do it.

To fully enjoy life, you must learn life skills to live within your means. The amount of money you save without transferring to financial companies will surprise you. Family vacations, buying new cars in cash, spending new clothes without paying interest on it are goals you can achieve. The struggle between income and expenses stops when you don’t owe creditors. You no longer need to work as hard as before, it becomes a choice. If your income belongs only to you, you will never need to visit a financial company for a loan or own another credit card for life. Debt relief will give you the best feeling in the world.


Lesson 2 – The goods of kings!


What is the “Goods of Kings”

Power is simply “the ability to act.” Power has long been a commodity of kings. Initially, power came to those who were the strongest physically. Later, it came to those who inherited a special legacy thanks to royal power. to those who had the greatest wealth or capital. Today, those who possess special and valuable knowledge have the greatest capacity for power. ” Anthony Robbins – from his book “Unlimited Power”

Specialized and valuable knowledge.

In Lesson 1, we learned that only two things can stop you from becoming rich. You don’t know how, or don’t want to apply what you know. Today we will dive into the number one reason.

Simply put, you have never been taught how to become rich. Just think for a moment that this is what separates you from Donald Trump in the world, or what of it – any mega-rich person?

Or a couple? No! we all have the same 24 hours every day. As you learn, the way you spend your 24 hours will still change.

Is this a privileged background? Not at all. Remember, rags to wealth require rags to begin with.

A-a-a! It has to be education! Not at all! At least not in the traditional sense. When we think about education, most of us think about going to school, graduating from school, maybe going to college or graduate school so we can finish school and get a good “JOB”. Traditional education teaches us to become a productive part of the workforce, but in no way teaches the basics of wealth! You may remember going to algebra classes, or learning a foreign language, or history, or economics.

How many times have you gone to “Wealth 101” or achieved personal financial success? We never suspect, and if you happened to attend classes that you feel taught wealth building, doesn’t it make sense that your instructors were supposed to be rich? Were they?

Did you know that Fred Smith, the founder of Federal Express, got a “D” on his term paper. One that describes the world’s first overnight package delivery service! AKA Fed_Ex

Avis car rental AVIS, McDonald’s burgers from McDonald’s, Colonel Sanders with fried chicken in Kentucky, Lear from Lear Jets, Henry Ford and Abraham Lincoln have one thing in common – they never graduated!

So much for traditional education!

The fact is that special and valuable knowledge on building wealth is self-taught. The good news is that it’s easy to understand and enjoy learning, and when you apply that knowledge, you’ll start to create wealth.

Welcome to your first day of classes, Creating Wealth 101.

How did most wealthy people do that?

If you knew you had a 74% chance of winning, would you buy a lottery ticket? Every week millions of people line up to buy lottery tickets to get a chance to get rich. However, according to the U.S. Department of Health and Welfare, less than 1% of all wealth in America was created by lottery winners.

What if you could beat the odds!

74% of all wealth in America was done in one direction only; opening and owning your own business. If you own your own business, the chances of becoming rich are 284% greater than any other way of creating wealth. This includes all the other methods of getting rich – from sports figures Pro, to smart investors and lottery winners! It is absolutely clear that if you want to get rich, you have to have your own business!

So we have now learned that the greatest opportunity to become rich is to own your own business.

The second set of special and valuable knowledge is a completely new way to look at your personal finances.

Robert Kiyosaki in his most popular book № 1 has developed a whole new and simplified way to understand your personal spending and earning patterns, as well as how they bring you closer to either wealth. Explain these concepts of cash flow in more detail.

The following information is gathered from his book “Rich Dad”. “Poor dad. What do the rich teach their children about money, and the poor and the middle class do not!” and Robert’s website: http://www.richdad.com

Financial statements

Rich Dad said: “The most risky investor of all is a person who does not control his personal financial statements. These are people who have nothing but obligations, which they believe are assets and as much expenses as and income and whose only source of income is their work ”.

Understanding your financial statements is the basis for controlling your personal finances. Rich Dad believes that the relationship between the income statement and the balance sheet was everything. What is the first step to financial freedom? Take control of your financial statements.

Cash flow pattern for the poor (or young people who still live at home): the poor spend every penny and have no assets and liabilities, only expenses. Cash flow is limited by income and expenses, and the cash flow structure of low-income people reflects income from work used to pay for expenses such as rent, food, clothing, transportation, and taxes.

The structure of cash flow for the middle class: middle class people accumulated more debt as they performed. The pay rise allows them to borrow more money from the bank so they can buy personal belongings such as bigger cars, holiday homes, boats and motor homes.

Their wages come in and are spent on running costs and then on repaying that personal debt. As incomes increase, so does their personal debt. This is what we call the rat race.

Cash flow pattern for the rich: rich people work for them. They gained control over their expenses and focused on acquiring or building assets. Their businesses pay most of their expenses, and they have few personal obligations, if any.

The flow chart of a person’s cash can show a combination of these three types. What chart does your financial report reflect? What story is your financial report about? Do you manage your expenses?

As you can see, the poor, the middle class and the rich have radically different flows. The poor and middle class work for profit and either spend money on basic necessities or on maintenance and a steady increase in the debt burden; while the rich have money or assets working on them and they invest their profits in extra profitable cars.

The part becomes financially viable in order to ride the ball. You may ask yourself, “How can I invest my income in income-generating assets when I spend most or all of my income on needs and debts?”

In tomorrow’s lesson, we’ll show you how to immediately put extra money in your pocket this month without changing jobs, without demanding a raise, and without making a profit from any business you decide to start! In fact tomorrow we will show you how you can finance your first profitable asset with cash to help your monthly budget!

That’s all for today’s lesson.

Here are the highlights to remember from today’s lesson:

When it comes to building wealth, formal education is not needed, and does little to help you become rich. 74% of all wealth in America was done in one direction only; opening and owning your own business.

Your greatest opportunity to become rich is to own your own business.

The poor, the middle class and the rich have significantly different cash flow patterns and spending habits.