This is a simple review of one page of Robert Kiyosaki's book the Cashflow Quadrant. Imagine what's in store for you if you read the whole book! If your personal finances are not where you would like them to be this article will explain why instead of taking on a second job you need to consider starting your own home business; your own online home business. Imagine working in your pj's if you would like!
p.4 is Robert Kiyosaki's famous buckets of water analogy.
At the end of the story he asked the question: Are you carrying buckets of water or are you building a pipeline?
WOW! OPRAH LIGHT BULB MOMENT! AHA MOMENT! REVELATION! LET THE BELLS RING OUT AND THE BANNERS FLY. [Who said that by the way? A cartoon character?] Call it what you will. If you have read Cashflow Quadrant and this wasn't your experience you need to read it again.
My thinking was forever changed.
I had a job. I was carrying buckets of water. When I stopped the money stopped. I had all my eggs in 1 basket. Any number of things could take me down. My health, my employment situation could change, my family situation could change. We see it all the time and in this economic downturn it is magnified. We all know someone who has been down-sized, had health issues, become widowed or divorced. Any number of catastrophes can befall us. Yet we never believe it will happen to us.
When you are completely reliant on wages or salary for your income you are in a very precarious position.
If your personal finances are not where you would like; consider diversifying. Instead of getting by with less and less; instead of having an ever decreasing income circle; why not expand it? Why not take Robert Kiyosaki's advice? Instead of taking on a second job; why not start your own business? Why not start a home based business?
As long as you are working a job; you are carrying buckets of water. When you stop the money stops.
The definition of insanity is to keep doing what you are doing and expect different results. Perhaps this economic downturn is a wake-up call? It should be. Is your ladder leaned up against the wrong wall? If you are in corporate America that could well be the case.
Most people think they are financially literate but then you look at their personal finances. Their personal finances are a shambles. If you could see what people actually own versus what they have on credit there would be a lot of naked people driving around in phantom cars and sleeping in empty houses. Kind of like the story of the Emperor's New Clothes.
People tend to think if I only made an extra $10,000/year everything would be fine. Not true. People with 6 figure incomes are simply broke at a different level. They are wearing more expensive clothes, driving fancier cars and living in larger houses but they are still broke.
How many people do you know that have 3-6 months of wages saved? Do you?
If I ask you: "Is your house is an asset or a liability?" If you answer an asset you are not financially literate. People have stopped reading Kiyosaki's book at this point. So to clarify; he is not saying not to buy a house he is just making sure you understand the vocabulary of the financially literate. His definition of an asset is something that puts money into your pocket and a liability is something that takes money out of your pocket. If you stopped working tomorrow would your house feed you?
The confusion arises when you go to the bank and they get you to list your assets. They even let you name your car as an asset. And it is an asset; an asset for them! Not you! If you re-neg on your payments they get your car.
In conclusion the reason I recommend Robert Kiyosaki's Cashflow Quadrant is to give you a desperately needed wake-up call. What are your personal finances really like? Do you pay yourself 1st? Does 10% of your income get put where you can't touch it? Instead of taking on a 2nd job; I strongly recommend that you seriously consider starting your own home business.