Rich Dad, Poor Dad “Study hard, get good grades and find a high paying job with good benefits” is advice from a previous era.

The Rich Don’t Work for Money Avoiding the trap fear and greed The rat race - work to spend and spend to have a job is a short term solution to a long term problem The poor and middle class believe that money is real and that the company or government will look after them.

Why Teach Financial Literacy? You must know the difference between an asset and a liability and buy assets. The rich buy assets but the poor and middle class buy liabilities they think are assets. The cash flow pattern of an asset is from Assets to Income. (pg 60) The cash flow pattern of a liability is from Liabilities to Expense.

Why Teach Financial Literacy? The financial nightmare hard working educated couple marries and begins their careers. decide to save for dream home, and so work hard to make more money – taxes go way up. They buy their new house and furnish it, and now have property taxes, mortgage and credit card debt. Kids come along who cost money and so the parents work harder and up go the taxes.

Why Teach Financial Literacy? As an employee who is a homeowner: you work for someone else and are making the owner(s) or shareholders rich. you work for the government, from Jan to May to pay your taxes You work for the bank, paying off your mortgage, student loans and credit cards.

Why Teach Financial Literacy? Remember this simple observation: The rich buy assets The poor only have expenses The middle class buys liabilities they think are assets

Mind Your Own Business What are assets? Business that do not require your presence to run and make money Stocks Bonds Mutual Funds Income generating real estate Royalties from intellectual property anything else that has value and produces income

Mind Your Own Business The cashflow quadrant Employee Business Owner Self Employed Investor

The History of Taxes and the Power of the Corporations Is Robin Hood a hero or a villain? How about “the rich should pay more in taxes and give it to the poor?” The reality is that the rich are not taxed, it’s the middle class which pays for the poor.

The History of Taxes and the Power of the Corporations What is a corporation? It is a legal entity which limits the risk of its owners to the value it contains. It can take as expenses things that individuals cannot. It is what the rich use to hid their money from the taxman.

The History of Taxes and the Power of the Corporations Financial IQ Accounting – financial literacy. You need to be able to read and understand financial statements. Investing – the science of money making money. Understanding Markets – the science of supply and demand. Law – The corporation, LLCs, and other legal instruments

The History of Taxes and the Power of the Corporations The rich with corporations: Earn Spend Pay Taxes People who work for the corporation: Earn Pay Taxes Spend

The Rich Invent Money The need of “guts.” How creative can you be at coming up with financial solutions? Most people only know one way: work hard, save and borrow.

The Rich Invent Money Which sounds harder to you? Work hard, pay 50% in taxes, save what is left after the bills are paid. Your savings earns 5% which is also taxed Take time to develop your financial intelligence and harness the power of your brain and the asset column.

The Rich Invent Money You need to develop the following skills How to find an opportunity that everyone else has missed. How to raise money. Most people go to the bank, but there are much better ways. How to organize smart people. Accountants, lawyers, brokers, etc. are people who can work with and for you.

Work to Learn – Don’t Work for Money There are skills that you should develop so that you will be better at business communication marketing sales leadership financial understanding

Work to Learn – Don’t Work for Money Don’t specialize to much An expert is someone who knows more and more about less and less till he knows everything about nothing. The more you specialize, the less options you will have. A broad understanding of economics, history, politics and business will only help you make money.

So why not? There are five reasons that people don’t grow assets and become financially independent. Fear – of losing money Cynicism – don’t let doubts paralyze Laziness – busy people are often the most lazy Bad Habits – our lives reflect our habits Arrogance – arrogance + ego = ignorance