To many people, getting through the misinformation about financial success can lead to conflicting and frustrating outcomes. The principles of financial success are not as complicated as you may think once you get a few fundamentals under your belt.
As a broad overview, financial independence and wealth building can be achieved by combining a well-balanced knowledge of investing, real estate, and owning a business as well as increasing your own personal financial intelligence. When properly combined, these factors can lay a great framework to achieving financial success.
Robert Kiyosaki, author of Rich Dad Poor Dad, provides a great foundation for improving your financial education. He discusses in a very practical term the differences between assets and liabilities that even the most amateur of financially minded people can understand and relate to. Some key lessons that we learn from Robert Kiyosaki include:
- It’s not important how much money you make, but rather how much money you keep
- The poor and middle class work for money while the rich make money work for them
- It’s not the smart who get ahead but rather it’s the bold who win
- The single-most asset that we have is our mind. By properly training your mind, you can create enormous wealth
- The rich focus on their asset columns while the middle class and poor focus on their income statements (Profit and Loss).
- People who avoid failure are also avoiding success
Another important principle for financial success is to understand that the tax code was never designed to help the individual worker. It was designed to benefit corporations. Understanding this secret will help you to put a plan in place to set up and grow your business in order to maximize your benefits of the tax code. Robert Kiyosaki also lays out in very simple terms in what he calls the Cash Flow Quadrant how labor vs. capital are disbursed. This concept presents the idea that 5% of the wealth is help by employees and the self-employed while 95% of the wealth is held by business owners and investors. Combining this tax knowledge with the Cash Flow Quadrant are key to being able to improve your financial well-being.
Combining these concepts along with a basic understanding of accounting, investing, market conditions, and law will set you on a path towards achieving financial success.