Yes, I have a clear understanding of cashflow...however, I've been studying your materials since 02. This online book and method of capturing individual reader feedback is genius. RDPD used simple drawings like boxes (rectangles) & pointing arrows to visually describe cashFLOW...with the emphasis on the word FLOW. Non-RD fans or new-RD readers may not fully understand the FLOW part without diagrams. Earned income represents 95% of the cashFLOW people have to spend. Continuing to focus on the FLOW of cash before getting to deep into leverage, debt, and financial statements---which should be described as "loan applications or credit app, etc., since that is what banks call a financial statement. Also, emphasis on the fact that a credit report & score belongs to the consumer!!! Banks SHOULD NOT BE TELLING consumers how credit worthy they are...banks are only using credit scores as 1 method of determining payback ability. Since rates & terms are hooked to credit scores...it is really a discrimintory method of loaning money based on financial strength. If consumers understood more about the way banks evaluate a borrower's ability to repay the debt...then consumers wouldn't feel so insecure about asking to borrow money. Robert & Kim, keep "Elevating the financial well being of humanity."
Talk about the veil being lifted from my eyes! I didn't even know what cashflow, asset, liability etc. was until I read Rich Dad Poor Dad. Cashflow to me is the game of the rich and keeping people poor and ignorant. I, for one, was ignorant before rich dad poor dad and still have alot to learn. If I don't get financially smart then MY CASHFLOW will be in the hands of the KNOWING.
Hi Robert
I am from India and have studying these topics from last 4 Years.
::This is for Kavita::
I know, we in India can't get residual income from property due to its very high price. You can wait until price of property declines or try something else like:
----------------------------------------------------------------
1. Have an interesting Website:::::
(I had one in past and made handsome profit out of it. It was just a hobby task where I made a website for my college and earned my pocket money through online advertisers)
2. Start a Business:::::
Currently, I am running my own Key duplicating business. Visit: Harison Keys. It may not sound residual business now but I have few plans to open more outlet and get partial residual income(=not requiring my 100% sitting) from it
3. Bank Fixed Deposits:::::
I am getting 10% on my fixed deposits from bank. Today, the interest rate are lower than 10% but at least something is better than nothing
----------------------------------------------------------------
You may get some more practical ideas from your friends & family. Just keep your eyes open. Opportunities are everywhere.
"Vision is the art of seeing things INVISIBLE." --Jonathan Swift
The more I read your books, the more I increase my Financial I.Q. Cashflow for get more simpler to understand. I have been playing Cashflow the board game and I understand the what your asset is coming from (real Estate, Business,or Paper), you as investor is always looking for opportunity to expanded cashflow.
Yes I do understand the concept of cash flow, But what i want to understand is from where ( What avenues) can cash flow occur) Real estate yes, But in our country, in the place where we reside, even if you take an apartment, the rental income would not be equal to the loan EMI that we pay to the bank so then from what avenues can we get cashflow.
When I played cashflow games, I attention many people invested stock, bonds, mutual fund, they buy low, sell high. I invested Apartment, house on mortgage, e.g. I take the US$2,000, total cost of US$50,000, they provide US$250 per month, I invested them. When I met the house can sell US$135,000 card, I sell it take US$87,000, then I invested the big deal. When my passive income over Total Expenses, I quit Rat Race to Fast Track. The Fast Track, it provide Passive Income per month, and the not liabilities. In Real World, when I start Co. Ltd, I repay the Co. Ltd Assets to Creditors, Bank Loan, My Co. Ltd complain by other people, not affect personal assets. I join Co. Ltd groups only.
Fabulous chapter Robert, I have read your books also though. Maybe when you discuss the use of debt would be the best time to show an example of cashflow though.
If there is a currency reset, good assets should still produce cashflow after the reset - possibly with a short interruption though so it was good to see you talk about the Veitnamese lady. I hope you cover the 'protect' part at some point.
Personally I think jobs and cash flows are flowing out from western countries and into developing countries like China and India, especially China. Although there are many news about China's declining in exports, I am amaze to see that China is still having a positive growth rate on its economy.
So my question is, in macroeconomic sense, how does the country acquire a positive cash flow? I don't think raising taxes and cut spendings alone are the right answers because they only extend to the government and do not necessarily help employees and corporations. (I think a country = government + citizens + corporations)
I don't think it is clear to those hearing it for the first time. I remember it from Rich Dad Poor Dad, and from some of your videos, but I think that maybe one simple example would be good for the first-timers.
Robert, I want to thank you for personally recommending cash flow through proper business opportunities. I have a background in Real Estate yet started a business with Amway Global 20 years ago and have a solid, growing income. When we present our business we show your Cash Flow Quadrant [always showing you and your books as the source of this teaching]. The Cash Flow Quadrant truly shows people where they are today, and the need for a Business System. Thank you again as I know some try to criticize your stand, but you seem to be willing to take the truth as your stand and not worry about the rest. This new book is a bold expose, of an area that I used to have to hunt for information regarding this "Conspiracy". Thanks again for doing what is right!
"Even assuming that having the gold standard is desirable, there's not enough gold in the world to back America's currency - let alone the world's currency."
That's a fallacy that all the great bankers want us sheep to believe.
Murry Rothbard says "More money does not supply more capitol, is not more productive, does not permit "economic growth".
How did the world operate before the US Dollar existed? any fiat currency?
The great thing about gold and silver is you can not create it so easily. It takes work...labor....blood, sweat and tears.....Paper money ......any fool can cut a piece of paper and put a numeral from 1 to 1,000,000,000 on it.
It's true what you say about money flowing away from some areas and flowing to other areas. I used to live in Garden City New York until 2002 when me and my wife purchased our own home in Bushkill Pennsylvania. The housing prices were going up in Garden City New York at that time and the average person looking to purchase a home there could not afford the price they were asking for homes then and now. So we looked towards Pennsylvania for affordable house prices. We purchased a home here in 2002 and the price of our home has gone up since then. Money is still flowing to our area and this area is a prime example of cash or money flowing to it. There are other areas of the country where people can take advantage of this cash flow situation. You just have to look to find them.
Robert, thanks to you I have a much better understanding of cash flow and money, in general, than I did 7 yrs ago when I 1st read Rich Dad. What I would love to see, and perhaps this is not the chapter or section for it, but where (geographically) is the money flowing? I know China and India are two obvious place, however, and I may be wrong, but it is my understanding that they are economically crippled also. I have recently been introduced to an online currency, backed by gold, and I could see that becoming the basis for an underground economy. I know wealth is flowing overseas, but where are the possible emerging markets? Are there places that will not feel the impact of the next great depression, and how do we profit from that knowledge? I have researched these questions extensively myself, and have some glimpses of possible answers, but I imagine you have much better insight in to this than I do. Again thank you for all you do!
I do have a better understanding of cash flow, however is real estate the only way to get cash flow? Can you explain cash flow in more depth? Thank you.
Even assuming that having the gold standard is desirable, there's not enough gold in the world to back America's currency - let alone the world's currency. Therefore it's up to us to ensure checks and balances and oversights (which, obviously, we have insufficient numbers now).
As much as I think I understand it . . . . I see a broader understanding and a spiraling application of the principles being discussed. The potential is amazing when one thinks about it. This is really valuable . . . thank you.
Now, learning to use it and stay alert to changes and challenges.
banks do run out of money when people refuse their money
Hi Robert. You are wrong about cash flow and banks never running out of money. Cash flow only exists when people trust "what" cash you are using to "flow". Banks run out of money when people don't like the money they are using. The trash heap of "bad" money is overflowing with bad money from the past. The Zimbawbwe currency is the latest example. Cash will not flow when the medium of exchange (money or cash) is not to be trusted. This is one point you seem to be missing. Now, the US dollar is not to be trusted. Cash is not flowing. People are looking for other forms of cash. Throughout history gold and silver have been the best most stable form of cash. Every American should own some silver coins. If you don't you are a fool and do not own the best most trusted form of cash that holds value. Gold is even better but you must have Labored enough or own other assets to trade for gold. silver is the poor man's gold....cash....that will always flow.
Good debt and bad debt: you are wrong here too because you don't understand that debt doesn't have to come from a bank. It can come from rich people like you.....and you don't have to create money out of thin air to loan it to me.
Banks are the most sinful institutions in the world because they decieve us into thinking that debt as money is better than gold and silver. They offer us "treasures of wickedness".
Thank you
I have thought of investing in my local city where multi-family building are every where. But this city once known as the spindle city for it large quantities of manufacuturing plants is now known as the scholarship city. In older photos I see a down town with crowded streets. Almost New York like. Today you can bowl down the side walk and not hit anyone. We have had major manufacuters and small ones alike close there doors here. And I have thought to myself, how can I invest in these buildings when jobs are becoming scarce? Who will stay in these apartments? And for how long and how much? Where is the insentive to stay or invest in a city with a shrinking cashflow? As you said follow the jobs and you will find the cashflow!
I now understand the word cashflow and its importance in my personal finance. Your concept of cashflow and its used in wealth creation gives me the confidence that I can also improve my life using the same approach.
That you borrow money to buy income-generating assets like apartments where there are jobs. The income (rent) you get is greater than the expenses (interest, principal, insurance, other expenses) which gives you a profit or positive cash flow. Your tenants pay for your debt (your loan), you have money left over for more investing, you don't exert any physical labor and that makes it "good" debt.
I have done many things to improve my own knowledge of cash flow, and feel you are doing an excellent job. Having taught Personal Finance to at risk population, and quickly learning that they were in fact a "blank slate". The sheer level of ignorance that I started with and I saw reflected in my classes has haunted me. Now I have credentials that can "prove" to society that I have mastered the many complex issues in business. Based on my experience I support your efforts in educating along with calls for a financial education becoming a standard part of each student learning "cycle".
Based on my understanding of your books, "cash flow" refers to passive income. For example, if you have rental property, you receive a certain amount of money every month as rent even if you are not living nor working in that place. There are many ways to earn passive income and increase cash flow to achieve financial independence. Legitimate multilevel marketing is one other example of leveraging to achieve cash flow. It is very important to check out the company and the people you will be working with to be sure that you are not joining a company engaged in illegal acts like Ponzi schemes or pyramiding.
The term "cash flow" will be familiar to those of us who have read your books. For others, a simple example of stocks and flows might help. For example, you might use the bathtub analogy to show the difference between cash flow and cash balance. This seems to work with my students.
Yes, I have a clear understanding of cashflow...however, I've been studying your materials since 02. This online book and method of capturing individual reader feedback is genius. RDPD used simple drawings like boxes (rectangles) & pointing arrows to visually describe cashFLOW...with the emphasis on the word FLOW. Non-RD fans or new-RD readers may not fully understand the FLOW part without diagrams. Earned income represents 95% of the cashFLOW people have to spend. Continuing to focus on the FLOW of cash before getting to deep into leverage, debt, and financial statements---which should be described as "loan applications or credit app, etc., since that is what banks call a financial statement. Also, emphasis on the fact that a credit report & score belongs to the consumer!!! Banks SHOULD NOT BE TELLING consumers how credit worthy they are...banks are only using credit scores as 1 method of determining payback ability. Since rates & terms are hooked to credit scores...it is really a discrimintory method of loaning money based on financial strength. If consumers understood more about the way banks evaluate a borrower's ability to repay the debt...then consumers wouldn't feel so insecure about asking to borrow money. Robert & Kim, keep "Elevating the financial well being of humanity."
Talk about the veil being lifted from my eyes! I didn't even know what cashflow, asset, liability etc. was until I read Rich Dad Poor Dad. Cashflow to me is the game of the rich and keeping people poor and ignorant. I, for one, was ignorant before rich dad poor dad and still have alot to learn. If I don't get financially smart then MY CASHFLOW will be in the hands of the KNOWING.
Yes, consumer credit bad, asset credit good. So, don't borrow to buy, unless there is a good cash flow supplied!
BEP
Hi Robert
I am from India and have studying these topics from last 4 Years.
::This is for Kavita::
I know, we in India can't get residual income from property due to its very high price. You can wait until price of property declines or try something else like:
----------------------------------------------------------------
----------------------------------------------------------------
You may get some more practical ideas from your friends & family. Just keep your eyes open. Opportunities are everywhere.
"Vision is the art of seeing things INVISIBLE." --Jonathan Swift
The more I read your books, the more I increase my Financial I.Q. Cashflow for get more simpler to understand. I have been playing Cashflow the board game and I understand the what your asset is coming from (real Estate, Business,or Paper), you as investor is always looking for opportunity to expanded cashflow.
Yes I do understand the concept of cash flow, But what i want to understand is from where ( What avenues) can cash flow occur) Real estate yes, But in our country, in the place where we reside, even if you take an apartment, the rental income would not be equal to the loan EMI that we pay to the bank so then from what avenues can we get cashflow.
Thanks and Regards
Kavita
When I played cashflow games, I attention many people invested stock, bonds, mutual fund, they buy low, sell high. I invested Apartment, house on mortgage, e.g. I take the US$2,000, total cost of US$50,000, they provide US$250 per month, I invested them. When I met the house can sell US$135,000 card, I sell it take US$87,000, then I invested the big deal. When my passive income over Total Expenses, I quit Rat Race to Fast Track. The Fast Track, it provide Passive Income per month, and the not liabilities. In Real World, when I start Co. Ltd, I repay the Co. Ltd Assets to Creditors, Bank Loan, My Co. Ltd complain by other people, not affect personal assets. I join Co. Ltd groups only.
My Blog:
http://jessekevinsammak.mysinablog.com
Fabulous chapter Robert, I have read your books also though. Maybe when you discuss the use of debt would be the best time to show an example of cashflow though.
If there is a currency reset, good assets should still produce cashflow after the reset - possibly with a short interruption though so it was good to see you talk about the Veitnamese lady. I hope you cover the 'protect' part at some point.
Again, fabulous chapter.
Personally I think jobs and cash flows are flowing out from western countries and into developing countries like China and India, especially China. Although there are many news about China's declining in exports, I am amaze to see that China is still having a positive growth rate on its economy.
So my question is, in macroeconomic sense, how does the country acquire a positive cash flow? I don't think raising taxes and cut spendings alone are the right answers because they only extend to the government and do not necessarily help employees and corporations. (I think a country = government + citizens + corporations)
This section opened for me a new interpretation of the term "cash flow", and your example of investing in apartments near job sources was excellent.
Before, I interpreted strong cash flow to mean "a plentiful source of cash to fund operations."
Now I consider it to mean "the velocity of cash is high and cash is plentiful", which is a much more powerful interpretation.
That was a very useful lesson.
I don't think it is clear to those hearing it for the first time. I remember it from Rich Dad Poor Dad, and from some of your videos, but I think that maybe one simple example would be good for the first-timers.
Robert, I want to thank you for personally recommending cash flow through proper business opportunities. I have a background in Real Estate yet started a business with Amway Global 20 years ago and have a solid, growing income. When we present our business we show your Cash Flow Quadrant [always showing you and your books as the source of this teaching]. The Cash Flow Quadrant truly shows people where they are today, and the need for a Business System. Thank you again as I know some try to criticize your stand, but you seem to be willing to take the truth as your stand and not worry about the rest. This new book is a bold expose, of an area that I used to have to hunt for information regarding this "Conspiracy". Thanks again for doing what is right!
"Even assuming that having the gold standard is desirable, there's not enough gold in the world to back America's currency - let alone the world's currency."
That's a fallacy that all the great bankers want us sheep to believe.
Murry Rothbard says "More money does not supply more capitol, is not more productive, does not permit "economic growth".
How did the world operate before the US Dollar existed? any fiat currency?
The great thing about gold and silver is you can not create it so easily. It takes work...labor....blood, sweat and tears.....Paper money ......any fool can cut a piece of paper and put a numeral from 1 to 1,000,000,000 on it.
My understanding of cashflow is getting clearer all of the time. The more I read.
It's true what you say about money flowing away from some areas and flowing to other areas. I used to live in Garden City New York until 2002 when me and my wife purchased our own home in Bushkill Pennsylvania. The housing prices were going up in Garden City New York at that time and the average person looking to purchase a home there could not afford the price they were asking for homes then and now. So we looked towards Pennsylvania for affordable house prices. We purchased a home here in 2002 and the price of our home has gone up since then. Money is still flowing to our area and this area is a prime example of cash or money flowing to it. There are other areas of the country where people can take advantage of this cash flow situation. You just have to look to find them.
Raymond Day
President
Mastermind Associates
http://www.mastermindassociates.org
Robert, thanks to you I have a much better understanding of cash flow and money, in general, than I did 7 yrs ago when I 1st read Rich Dad. What I would love to see, and perhaps this is not the chapter or section for it, but where (geographically) is the money flowing? I know China and India are two obvious place, however, and I may be wrong, but it is my understanding that they are economically crippled also. I have recently been introduced to an online currency, backed by gold, and I could see that becoming the basis for an underground economy. I know wealth is flowing overseas, but where are the possible emerging markets? Are there places that will not feel the impact of the next great depression, and how do we profit from that knowledge? I have researched these questions extensively myself, and have some glimpses of possible answers, but I imagine you have much better insight in to this than I do. Again thank you for all you do!
I do have a better understanding of cash flow, however is real estate the only way to get cash flow? Can you explain cash flow in more depth? Thank you.
Even assuming that having the gold standard is desirable, there's not enough gold in the world to back America's currency - let alone the world's currency. Therefore it's up to us to ensure checks and balances and oversights (which, obviously, we have insufficient numbers now).
As much as I think I understand it . . . . I see a broader understanding and a spiraling application of the principles being discussed. The potential is amazing when one thinks about it. This is really valuable . . . thank you.
Now, learning to use it and stay alert to changes and challenges.
Hi Robert. You are wrong about cash flow and banks never running out of money. Cash flow only exists when people trust "what" cash you are using to "flow". Banks run out of money when people don't like the money they are using. The trash heap of "bad" money is overflowing with bad money from the past. The Zimbawbwe currency is the latest example. Cash will not flow when the medium of exchange (money or cash) is not to be trusted. This is one point you seem to be missing. Now, the US dollar is not to be trusted. Cash is not flowing. People are looking for other forms of cash. Throughout history gold and silver have been the best most stable form of cash. Every American should own some silver coins. If you don't you are a fool and do not own the best most trusted form of cash that holds value. Gold is even better but you must have Labored enough or own other assets to trade for gold. silver is the poor man's gold....cash....that will always flow.
Good debt and bad debt: you are wrong here too because you don't understand that debt doesn't have to come from a bank. It can come from rich people like you.....and you don't have to create money out of thin air to loan it to me.
Banks are the most sinful institutions in the world because they decieve us into thinking that debt as money is better than gold and silver. They offer us "treasures of wickedness".
Thank you
i do understand it , but i also read most of rich dads books
I have thought of investing in my local city where multi-family building are every where. But this city once known as the spindle city for it large quantities of manufacuturing plants is now known as the scholarship city. In older photos I see a down town with crowded streets. Almost New York like. Today you can bowl down the side walk and not hit anyone. We have had major manufacuters and small ones alike close there doors here. And I have thought to myself, how can I invest in these buildings when jobs are becoming scarce? Who will stay in these apartments? And for how long and how much? Where is the insentive to stay or invest in a city with a shrinking cashflow? As you said follow the jobs and you will find the cashflow!
I now understand the word cashflow and its importance in my personal finance. Your concept of cashflow and its used in wealth creation gives me the confidence that I can also improve my life using the same approach.
That you borrow money to buy income-generating assets like apartments where there are jobs. The income (rent) you get is greater than the expenses (interest, principal, insurance, other expenses) which gives you a profit or positive cash flow. Your tenants pay for your debt (your loan), you have money left over for more investing, you don't exert any physical labor and that makes it "good" debt.
I have done many things to improve my own knowledge of cash flow, and feel you are doing an excellent job. Having taught Personal Finance to at risk population, and quickly learning that they were in fact a "blank slate". The sheer level of ignorance that I started with and I saw reflected in my classes has haunted me. Now I have credentials that can "prove" to society that I have mastered the many complex issues in business. Based on my experience I support your efforts in educating along with calls for a financial education becoming a standard part of each student learning "cycle".
Based on my understanding of your books, "cash flow" refers to passive income. For example, if you have rental property, you receive a certain amount of money every month as rent even if you are not living nor working in that place. There are many ways to earn passive income and increase cash flow to achieve financial independence. Legitimate multilevel marketing is one other example of leveraging to achieve cash flow. It is very important to check out the company and the people you will be working with to be sure that you are not joining a company engaged in illegal acts like Ponzi schemes or pyramiding.
Robert,
The term "cash flow" will be familiar to those of us who have read your books. For others, a simple example of stocks and flows might help. For example, you might use the bathtub analogy to show the difference between cash flow and cash balance. This seems to work with my students.
Terry