Notes Flashcards
Lesson #1
“The poor and the middle class work for money. The rich have money work for them.”
What does true learning take?
“true learning takes energy, passion, and a burning desire.”
“Most people have a price. And they have a price because of human emotions named ____ and _____.”
Fear and greed
Explain the Rat Race
“The pattern of get up, go to work, pay bills; get up, go to work, pay bills. People’s lives are forever controlled by two emotions: fear and greed. Offer them more money and they continue the cycle by increasing their spending. This is what I call the Rat Race.”
What is the difference between assets and a liability?
An assets puts money in your pockets. A liability takes money out of your pocket.
What define the assets?
“What defines an asset are not words, but numbers. And if you can’t read the numbers, you can’t tell an asset from a hole in the ground.” “In accounting,” rich dad would say, “it’s not the numbers, but what the numbers are telling you.”
Remember this simple observation:
- the rich buys assets.
* the poor only have expenses.
Suggested assets
“•Businesses that do not require my presence I own them, but they are managed or run by other people. If I have to work there, it’s not a business. It becomes my job.
- Stocks
- Bonds
- Income-generating real estate
- Notes (IOUs)
- Royalties from intellectual property such as music, scripts, and patents
- Anything else that has value, produces income or appreciates, and has a ready market”
What year did the United States started income tax?
“In 1913, an income tax became permanent in the United States with the adoption of the 16th Amendment to the U.S. Constitution.”
First lesson about money working for you…
“The first lesson of having money work for you, as opposed to you working for money, is all about power. If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.”
Accounting
“Accounting is financial literacy or the ability to read numbers. This is a vital skill if you want to build an empire. The more money you are responsible for, the more accuracy is required, or the house comes tumbling down. This is the left-brain side, or the details. Financial literacy is the ability to read and understand financial statements which allows you to identify the strengths and weaknesses of any business.”
Investing
“Investing is the science of “money making money.” This involves strategies and formulas which use the creative right-brain side.”
Understanding Marketing
“Understanding markets is the science of supply and demand. You need to know the technical aspects of the market, which are emotion-driven, in addition to the fundamental or economic aspects of an investment. Does an investment make sense or does it not make sense based on current market conditions?”
The law
“A corporation wrapped around the technical skills of accounting, investing, and markets can contribute to explosive growth. A person who understands the tax advantages and protections provided by a corporation can get rich so much faster than someone who is an employee or a small-business sole proprietor. It’s like the difference between someone walking and someone flying. The difference is profound when it comes to long-term wealth.”
“Financial intelligence is made up of these four main technical skills:”
“1.Accounting
Accounting is financial literacy, or the ability to read numbers. This is a vital skill if you want to build businesses or investments.
2.Investing
Investing is the science of money making money.
3.Understanding markets
Understanding markets is the science of supply and demand Alexander Graham Bell gave the market what it wanted. So did Bill Gates. A $75,000 house offered for $60,000 that cost $20,000 was also the result of seizing an opportunity created by the market. Somebody was buying, and someone was selling.
4.The law
The law is the awareness of accounting corporate, state and federal regulations. I recommend playing by the rules.”
“The main management skills needed for success are:
- Management of cash flow
- Management of systems
- Management of people”
What are the most important skills to specialized?
sales and marketing. The ability to sell—to communicate to another human being, be it a customer, employee, boss, spouse, or child—is the base skill of personal success. Communication skills such as writing, speaking, and negotiating are crucial to a life of success. These are skills I work on constantly, attending courses or buying educational resources to expand my knowledge.
“There are five main reasons why financially literate people may still not develop abundant asset columns that could produce a large cash flow. The five reasons are:”
- Fear
- Cynicism
- Laziness
- Bad habits
- Arrogance
