Winning the Game of Finance
SAVERS ARE LOSERS
Let’s start by debunking the myth around the realities of saving money to earn interest vs earning by other means. To understand fully this message, you have to be mindful of what means you have available to earn money. One of these means that often comes to mind is to earn interest from your savings.
In the following information from another post, there are 3 things I want you to be aware of. See if you can pick them up.
In the post: Financial Education and Planning, I wrote the following:
I hope you are not going to stuff this in your pillow or leave it to earn less than 1% in a Savings account! In the words of Robert Kiyosaki, “Savers are losers”.
You have to find your own source of Financial Education that resonates with you. We have followed many people over the years and one that I will recommend is one of my favorites: ROBERT KIYOSAKI.
I remember in one of his books, he mentions a time he wanted to buy this Sports Car. He tells this to his wife, Kim and without missing a beat, she asked him, “What asset are you going to build to pay for that car?”
Let’s list these three ideas and you check your list:
- Robert Kiyosaki’s comment: “Savers are losers”.
- What is your source of Financial Education?
- What are Assets and what do they do?
Let is suffice to say the reason behind Robert’s statement is because banks have been giving less and less interest and with Governments printing money, the value of your money loses value at a higher rate than the interest earned. (in other words, SAVERS ARE LOSERS in the GAME OF FINANCE)
What is the source of your Financial Education? Do you find someone with a well recognized company to give you financial advice? Who do you trust? Did you trust your teachers in high school? When you were in high school, you may have received some minimum form of financial education. You may have been taught how to balance a checkbook and “the value of having a savings account”. (Now, do you still trust your high school teacher?)
WINNING THE GAME OF FINANCE
2. What is your source of Financial Education?
I had to break this up a bit because we are walking a fine line when we are talking about winning the game of finance. It’s not just a game but it is life itself. We live by the means of our financial abilities. If you read mush of Robert Kiyosaki, you would recall one of his books: Rich dad, poor dad : what the rich teach their kids about money– that the poor and middle class do not!
What Robert is referring to is basically the language of money. This is what the rich teach their children about money. This is NOT mainstream financial education!
3. What are Assets and what do they do?
The next idea to address is the concept of an asset. Most people think of an asset as their most valuable possessions. This is when Robert Kiyosaki published his first book: Rich Dad Poor Dad. The publishers did not want to publish it because they thought he was crazy telling people, “Your house is NOT an asset!”
Why does he have numerous houses and they are assets and my house is NOT an asset?
My personal house is a liability because money flows out of it in terms of expenses. His numerous houses are assets because money flows in by means of rental income.
Simply understanding the difference between an asset and a liability can be the start of WINNING THE GAME OF FINANCE.