Important Points on Manage and Track Money

Here comes my first blog where I have mentioned important points to manage and  Track your money in the right way so that it creates an asset for you on the basis of the best selling book on self development “Rich Dad and Poor Dad” by Robert T. Kiyosaki. 

This is the first book when I genuinely started reading books and to start My reading habit from this books makes a good impact on me. This is the book which changed my mind set of handling money and the concept of money.

So, Here are the important points 

Assets and Liabilities

It tells the basic difference between assets and liabilities. An Assets puts the money in the pocket and liabilities takes money out of pocket. It is not how much money you make, it is

about how much money you keep.

Different class people

The poor and middle class work for money whereas rich people have money working for them. Poor and middle people have two emotions which control them forever that is fear and greed and that makes them trapped in the rat race whereas the rich learn how money works so they could make it work for them.

Rich people acquire assets and make it work for them, poor & middle people earn money and increase their spending and acquire liabilities that they think are assets. There is a cash flow pattern which represents the income statement and balance sheet of different classes which shows how a person handles money.

Wealth generation

Just by earning money, you may get rich but not wealthy. wealthy is an ability if a person stopped working today then how long could he survive? wealth is the measure of cash flows from the assets column compared with the expense column. If you want to be rich , you need to be financially literate. A person can be educated, successful and financially illiterate.

Income generating Assets

There are assets which generates income while you sleep, you still be making money, These are-

• Own Business which do not require his presence and people working for him
• invest in stock
• bonds
• Real estate
• intellectual property

Rich people focus on their asset column while others focus on income statements . Rich buy assets, the poor only have expenses and the middle class buy liabilities they think are assets.

Financial IQ

In financial IQ- Accounting, investing, market understanding, law includes. Earn money, spend everything it can and the left one gets taxed, this is the method the rich use while others earn money, pay tax and the left one is used for spending. So from that they get a desire to earn more and to spend more instead of financial knowledge of handling money.

Invest wisely, first learn about investing and how money works for you and then invest. it is not gambling if you know what you are doing, as great opportunities are not seen with eyes but are seen with mind.

Overcome obstacles

Overcome from your obstacles- fear, laziness, bad habits and arrogance are the obstacles which stop your growth. Overcome from these habits and invest yourself in more and more learning. Management of cash flows, people, and systems are skills which are needed for success. Always tries to turn every disaster into an opportunity. The most powerful tool we

have is our brain and it is the real asset we have, so invest in education first.

Make daily choices and invest in learning daily to become rich. choose your group wisely as whom you stay with, you become according to them. Pay yourself first and focus on your asset column. Buy luxury things from assets. Believe in power of giving

Therefore, Ordinary income gives the salary, portfolio income comes from stocks, bonds and passive income comes from Real estate. Ordinary earned income is money you work for while portfolio and passive income is money working for you.