| This may sound absurdly simple, but most people have no idea how profound this rule isMost people struggle financially because they do not know the difference between an asset and a liability
"Rich people acquire assetsThe poor and middle class acquire liabilities, but they think they are assets"
When rich dad explained this to Mike and me, we thought he was kiddingHere we were, nearly teenagers and waiting for the secret to getting rich, and this was his answerIt was so simple that we had to stop for a long time to think about it
"What is an asset?" asked Mike
"Don't worry right now," said rich dad"Just let the idea sink inIf you can comprehend the simplicity, your life will have a plan and be financially tiffany bracelets easyIt is simple; that is why the idea is missed
"You mean all we need to know is what an asset is, acquire them and we'll be rich?" I asked
Rich dad nodded his head
"If it's that simple, how come everyone is not rich?" I asked"Because people do not know the difference
between an asset and a liability
I remember asking, "How could adults be so sillyIf it is that simple, if it is that important, why would everyone not want to find out?"
It took our rich dad only a few minutes to explain what assets and liabilities were
As an adult, I have difficulty explaining it to other adultsWhy? Because adults are smarterIn most cases, the simplicity of the idea escapes most adults because they have been educated tiffany silver differentlyThey have been educated by other educated professionals, such as bankers, accountants, real estate agents, financial planners, and so forthThe difficulty comes in asking adults to unlearn, or become children againAn intelligent adult often feels it is demeaning to pay attention to simplistic definitions
Rich dad believed in the KISS principle-"Keep It Simple Stupid"-so he kept it simple for two young boys, and that made the financial foundation strong
So what causes the confusion? Or how could something so simple be so screwed up? Why would someone buy an asset that was really a liabilityThe answer is found in basic education
We focus on the word "literacy" and not "financial literacy What defines tiffany and co necklace something to be an asset, or something to be a liability are not wordsIn fact, if you really want to be confused, look up the words "asset" and "liability" in the dictionaryI know the definition may sound good to a trained accountant, but for the average person it makes no senseBut we adults are often too proud to admit that something does not make sense
As young boys, rich dad said, "What defines an asset is not words but numbersAnd if you cannot read the numbers, you cannot tell an asset from a hole in the ground
"In accounting," rich dad would say, "it's not the numbers, but what the numbers are telling youIt's just like wordsIt's not the words, but the story the words are telling you
Many people read, but do balenciaga bag replica not understand muchIt's called reading comprehensionAnd we all have different abilities when it comes to reading comprehensionFor example, I recently bought a new VCRIt came with an instruction book that explained how to program the VCRAll I wanted to do was record my favorite TV show on Friday nightI nearly went crazy trying to read the manualNothing in my world is more complex than learning how to program my VCRI could read the words, but I understood nothingI get an "A" for recognizing the wordsI get an "F" for comprehensionAnd so it is with financial statements for most people
"If you want to be rich, you've got to read and understand numbers If I heard that once, I heard it a thousand times from my rich rolex day date dad |
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