Have you ever heard a story about a lottery winner who wins BIG… but then loses everything a few years later?
Or the sports star who’s popping champagne and kissing models at 21, but working at a carwash for minimum wage at 29?
Maybe you have that friend who thinks he’s a millionaire because his house, his luxury SUV, his fine wine collection, all add up to a million dollars.
Or the one that wants to become a millionaire, but she decided to get a loan, get an Ivy League degree, and then—maybe—get a “safe”, salaried job.
Financially ignorant people come in all shapes and sizes. But I won’t let you be one of them.
So, I want you to drill these three principles in your head:
#1. If it doesn’t put money in your pocket, it’s not an asset. The house you live in, the car you use every day, they take money out of your pocket. So don’t call them assets. They are liabilities.
Assets put money in your pocket, and the only real assets are: real estate, businesses, and paper assets (stocks that pay dividends, and some commodities.)
Rich people buy assets (ideally with debt, or other people’s money), and prefer to rent their liabilities.
#2. It’s not about equity, capital gains, or net worth. It’s about cash flow. That’s the money that comes in each month that’s left over, after accounting for expenses.
The minute your passive income is bigger than your living expenses, you’re financially free.
You don’t have to be a millionaire to start acquiring assets. But if you start acquiring now, you can be well on your way to becoming one.
The average Jane or Joe with two investment properties producing $1,700/month in rent (and who only has $1,550/month in expenses) is already financially free.
While the “high net worth” suited-up executive earning $25,000 a month (who spends $27,000/month) is stuck squarely in the rat race.
#3. It’s not about how much you make. It’s about how much you keep.
This is how lotto winners go broke in a few short years. Cruises through the French riviera, watch collections, new cars, a new penthouse with a massive home theater…
All of that is great, but the rich only get the lifestyle AFTER they have assets producing cash flow to support it.
The financially ignorant get the lifestyle instead of the assets, then go broke.
What’s the takeaway from all this?
If you’re still reading, you’re well on your way to having the kind of knowledge that will make you rich.
Now is the time to take action.
How do you do that?