Hey again! This is the last part of the summary of Rich Dad and Poor Dad For Teens book.
It’ll cover several things, such as :
- Types of Incomes and Which one is considered as a best income
- Assets and Liabilities
- Income Statement and Balance Sheet
- The Differences between Rich vs Less Rich People Income and Expenditures
- Tips and Conclusion
Okay, so lets get started!
Incomes
There are 3 types of income, that you will start receiving soon :
- Wages and salary (high taxes) : You received it from your hard work to finish some tasks.
- Passive Income : You’re not involved directly into the process ; observer and receiver
ex : commercial property, royalties from publishing a books and writing songs. - Portfolio : The profit is generated from investing in paper assets
such as ; stocks, bonds, mutual funds.
To be classified as having the best income, you must learn several things :
- Convert the earnings into passive income or a portfolio.
- Aim for the hard-working or continuous revenue with a low interest rate (passive or portfolio).
- Notice the differences between an asset and a liability.
Assets and Liabilities
Assets (cash inflows) ; Stocks, bonds
- Anything you own that has the potential to create passive income or a portfolio.
- The money that saved in your wallet ISN’T an asset.
- The probability of a rise in value is also greater and higher.
Liabilities (the opposite of assets- in other words, things that suck up your money) ; debt, taxes, etc.
- The items that you have to spend money to obtain it.
- The value will be much lower when resold.
- A house is a liability if it can’t provide a source of income for you. A car is the same, because you need to pay for gasoline, maintenance, etc.
Income Statement & Balance Sheet
Asset cash flow is a strategy applied by rich people ; your assets can generate income
Cash flow liabilities = Missing Money
The money you have can only be used to meet your needs and desires.
Rich vs Less Rich People Income and Expenditures
Can you spot the differences?
Rich people spend a lot of their money on assets, which is creating a lot of passive incomes. In the other side, less rich people spend a lot of their money on liabilities (trying to buy everything that they want, strive for temporary happiness and satisfaction).
** Debt is not always a bad thing, there are 2 types of debt:
- A bad debt is the one that you must repaid ; credit cards
- Good debt is a debt that can be paid off with your investment.
- For example : the debt interest is 2%, and then you invest the money you’ve got, and the return you’ve got from the investment is 5%. So you can pay back the 2% interests and the remaining 3% is for you.
Basically you don’t run out or lose your money because of the debt.
- For example : the debt interest is 2%, and then you invest the money you’ve got, and the return you’ve got from the investment is 5%. So you can pay back the 2% interests and the remaining 3% is for you.
- Credit cards can be categorized as a good or bad debt. If you have a credit card, DON’T pay the minimum fee as the due date approaches, if so you’ll be charged with a higher interest and your bills will increase every month (even if you didn’t buy anything).
“Control your bills before they get out of hands.”
-Rich Dad Poor Dad for Teens-
Learn!
“Life is the greatest teacher, life cannot talk directly to you about what you will experience, but life is only packed with pressures around you. That ‘pressure’ is the unspoken word from “life”, saying “wake up and learn from it.” Life also tend to squeeze and suppress our weak spots in our life, but this book explains how to manage these pressure when they happened to you.”
“You will make big money when you learn not to rely on money too much. Have a “money-mastering” mindset.“
“Step to work for a penny and don’t let you get intimidated by money.”
Conclusion
Work and play are both good ways to learn something. Work to learn not to earn!
Don’t forget to put some money aside for the following three essentials things
Choose your friends and mentor wisely!
For mentors, look for people who have experienced difficulties before, not someone who can only give advice without having lived it.
Credits goes to rightful owners!
See you in the next content!
AMKNWORLD 
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