Who Controls Your Cash Flow?

controlling your cashflow

The difference between the Fast Track and the Rat Race

Last week, we talked about establishing an action plan for controlling your cash flow in the New Year. One of the things I asked you to do was to fill out your financial statement, and to write down your financial goals for the upcoming year and for five years down the road.

Today, I want to talk about why this type of planning is important.

The most important skill

My rich dad said, “People who can’t control their cash flow work for those who can.” Unfortunately, most people don’t know how to manage their cash flow, and consequently, most people struggle working as employees for most of their life.

Many people think that making more money will solve their financial struggles. But this usually isn’t the case. In fact, it, more often than not, causes bigger financial problems. Why? Because they haven’t learned how to manage the money they make. People who make more money often increase their spending and get deeper into debt.

If you want to be financially secure, that will not do. An important part of becoming the CEO of the business of your life is to take control of your cash flow. That is your most important skill.

Keep two sets of books

Most people think that keeping two sets of books is illegal…and it is, in most cases. But if you truly understand the world of finance, there must always be two sets of books—yours and someone else’s.

As CEO of your life, always remember these simple words from my rich dad, “For every liability you have, you are somebody else’s asset.”

The following is an example of two sets of books, yours and your banker’s.

For every liability, such as a mortgage, car loan, school loan, and credit card, you are an employee of the people lending the money. You’re working hard to make someone else rich.

Good debt and bad debt

Rich dad often cautioned me about good debt and bad debt. He said, “Every time you owe someone money, you become an employee of their money.”

While rich dad did borrow money, he did his best not to become the person who paid for his loans. He would explain to Mike and me that good debt was debt someone else paid for you. Bad debt was debt that you paid for with your own sweat and blood. That is why he loved rental properties. He said, “The bank gives you the loan, but your tenant pays for it.”

The Fast Track and the Rat Race

The two books concept can be used to show you the difference between the financial Fast Track and the Rat Race.

There are many types of financial Fast Tracks. The diagram below is one of the most common. It is the track between a creditor and a debtor. If you take the time to study this simple diagram, you’ll see the relationship between those who are financially secure and those who struggle financially.

Which statement is yours?

The path of money flowing between the two sets of books is what is called the financial Fast Track and the financial Rat Race. For one to exist, the other must exist as well. That is why there are always two financial statements. The question is, which statement is yours? Even better, which statement do you want to have?

Rich dad constantly told me, “Making more money will not solve your problems…if cash-flow management is your problem. The people who understand the power of financial numbers have power over those who do not.”

 This Article Is Originally Posted at: http://www.richdad.com Posted on: Tuesday, January 07, 2014 Written by: Robert Kiyosaki 

Note: IF you are serious about controlling your CashFlow we invite you to participate our CashFlow 101 this week. Click HERE for more information.

“The #1 Secret to Protecting Your Future Through Uncertain Economic Times is Financial Education“

Message from Kim and Robert Kiyosaki on Financial Education

Be Rich Cambodia, a project run by PM Leadership and Rich Dad Asia to bring Rich Dad education to Cambodia to contribute to our mission “To lead humanity into success and financial growth.” We have following programs:

  1. The Official CashFlow Club Cambodia “The more you play this Game the RICHER you become”
  2. Be Rich Workshop “How the RICH gets RICHER and how you can too”
  3. Rich Dad Asia Congress “Create wealth and happiness the Rich Dad Way”
  4. Evolution of Wealth “Where and How the RICH invest and how you can too”
  5. Rich Dad Asia Private Circle Cambodia “Where and How Robert Kiyosaki’s Elite Group invest and how you can too”

Watch the video below and listen to Kim and Robert Kiyosaki why you need to get yourself educated on Financial Education?

Now you have watched the video and you understand WHY you need to focus on improve your financial education. If you have not watched the video – Click play and watch it.

Answer to these questions:

  1. Are you happy with your financial situation right now?
  2. Do you know what the differences between the RICH, and the POOR?
  3. Do you know how and where the Rich making their wealth?
  4. Do you know what the Rich THINK, LEARN, and DO?
  5. Do you know where and how Robert Kiyosaki ‘s Elite Team invest in?
  6. Are you interested in improving yourself and get more success financially?

Sitting and wanting success does not bring you any changes. You need to take action. Get yourself educated. Make a plan and apply what you have learned to improve your life financially. Contact us and find our upcoming Rich Dad Asia programs in Cambodia. Contact us now!