Well the answer to that is simple; they don't believe in the formula. Before you completely shut your mind to the idea, I understand my last sentence is far from being convincing. But if you continue reading just a little bit further, you'll find that I'm not talking about some fictional idea, rather, I'm giving you a hard simple truth.
Okay here it is. The existence of such formula does not indicate that it is simple to incorporate, the reason why most people don't become rich is because the rich formula requires a lot more than just plugging in numbers to get the answer. The rich formula is complex and requires vast amount of time and right decisions to obtain the desired result. However, if incorporated correctly, it guarantees vast amount of wealth.
The Rich Formula:
Before learning the rich formula, you must first understand its foundation. The foundation starts with understanding the difference between an asset and a liability.
Popularized by Robert Kiyosaki in his best selling book Rich Dad, Poor Dad, an asset is something you purchase that returns more money back to you. An example of an asset is education. Although you spend money to obtain education, in the long run that education will pay you more than what you invested. This is why most of us still goes to college because despite of it's expensive price, it still offers returns that will pay off our investments. So to some extent we already know a little about the formula ourselves.
Like the picture above, the income you earn should be spent to assets so that it is returned back to your income. It's like recycling money, except you are getting back more than you put in.
On the other hand there is the liability. Truly rich people minimize this area of spending as much as possible. Liability is what you spend on that does not return anything back. I'm a college student so the biggest example of this I often witness is teens buying drugs, alcohol, or trip to a different country. The money goes into something that is temporary and dispensable therefore money essentially just gets flushed away.
Like the picture above, the flow of money does not return back to the income, it just disappears.
There it is, that's the simple formula. You can clearly see what needs to be done in other to be rich. You need to discipline yourself to stay as much as possible on the left side of the formula to become rich.
Truly rich people make a lifetime commitment in investing on assets such as, getting more education, buying up business, investing stock markets, befriending other successful business, etc in order to keep generating more and more flow of money into their income. Others spend money on liabilities like cars, houses, vacation trips, etc which brings them nothing but a bill.
I intend to keep this blog short so I intend to only write about the basics which I believe I have accomplished. Obviously there is a lot more to be said and analyzed about the subject, but that is the basic foundation. If you you are interested in learning more about this subject, I suggest reading Rich Dad, Poor Dad, by Robert Kiyosaki to get you started. I wish you the best of luck!
I came across your blog via a very negative comment you made about a girl singing. I have read Rich Dad, Poor Dad and created wealth beyond what most people even dream of, (my home in Las Vegas alone tops 16,000 sq.ft. and has an indoor pool among many other features, to give you an idea, while my home doesn't have a bowling alley, two of my neighbors have them). My point, when you reach a certain level of wealth, you want to enjoy some of the finer things that money can buy, After the saving and the investing and the building.
ReplyDeleteSo, Lester, I'm here to tell you that travel does educate one, as does an education, and should not be scoffed at indiscriminately, indeed travel is an investment also. Houses? Houses are an investment and handled properly, will bring tremendous wealth. Not to mention, what commercial property can do. Cars .... I agree - depreciating asset.
But the biggest part of creating wealth, for me, has been my attitude and outlook, your comment about the girl will bring about your defeat in your pursuit of wealth. No, not that one comment alone, but that general negative projection of energy from your being. Certainly, you are entitled to your opinion, however, to spread harsh negativity will not serve you.
Focus on your education because in reading this post, you need to correct some gross grammatical errors, your presentation of some very seasoned material is incomplete at best. Now, that's the difference between constructive criticism and downright negative energy bursting at the seams. In your profile, you say that you "love to think"? Methinks that perhaps you need to think more, spout less.