The Way to Wealth - 03 (Sound Accounting Principles)

Hey guys…

Today we will talk about something interesting that you need to understand in order to ride on the Way to Wealth

If you read the first two articles, The Way to Wealth – 01 and The Way to Wealth – 02 you certainly understand that the Rich are Rich because they acquire ASSETS

Assets generates Income

Liability generates Expenses

I will use the accounting diagram of Mr. Robert Kiyosaki from Rich Dad Poor Dad

Income: Salary Rent Dividend Interest
Expenses: Rent/house mortgage Phone Bills Gas
Assets: Rented Condo Stocks Bonds	Liabilities: House Car Boat

If you can understand the above, you will understand how rich people think… They add acquisitions in the Asset Section FIRST, which creates income i.e.: a rented condo provides income without WORK :) A brand new boat for water ski provides expenses such as insurance, gas, maintenance, etc without generating a single penny…

Chances are that you already have one source of income… your salary… guess what? There are better ways to generate an income… Acquire Assets, they will work for you. Every Dollar you put into your asset works for you like little solders. Consequently, every dollar you put into your liability column is like a virus… it takes energy away from you because it generates expenses…

So it is extremely important not to fall into the liability trap… if you buy assets, then your assets will eventually pay for your pleasures…