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Rule No. 1 To Being Rich : Know The Difference Between An Asset &  Liabilities

Rule One

You must know the difference between an asset and a liability, and buy assets. It is Rule No. 1. It is the only rule.KISS principle --- Keep It Simple Stupid.If you want to be rich, you've got to read and understand numbers.The rich acquire assets and the poor and middle class acquire liabilities."This is the Cash Flow pattern of an asset."

An asset is something that puts money in my pocket.A liability is something that takes money out of my pocket.

Income:

Paycheck

Dividends Interest

Rental Income

Royalties

Expense:

Taxes Mortgage

Fixed Expense

Food Clothing

Fun

Transportaton

Asset:

Stocks

Bonds

Notes

Real Estate

Intellectual Property

Liability:

Mortgage

Consumer Loans

Credit Cards



More Money will often not solve the problem; in fact, it may actually accelerate the problem.Today, kids want to be basketball stars, golfers like Tiger Woods, computer nerds, movie stars, rock stars, beauty queens, or traders on Wall Street. Simply becasue that is where the fame, money and prestige is. That is the reason it is so hard to motivate kids in school today. They know that professional success is no longer solely linked to academic success, as it once was.

By Robert T. Kiyosaki