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Your mindset is really the key, so let’s start with what you’ve always been told.
(Take a few minutes to read this)

Most of us are led to believe that if we just have more money coming in, then everything will be alright. That’s why we just work harder – to make more money.

But usually, we just spend a bit more. It’s a cycle and it is called the Rat Race.

You see the Rat Race goes like this and it will sound familiar I expect, as it is what most of us were taught growing up.

Go to school and then get a job to make some money. Spend that money to buy stuff (like a car).

Work hard, save your money (usually to buy the stuff you want). Buy more stuff (perhaps a house this time).

Work harder to make more money.

Buy more stuff. You have to have stuff to put in the house, right? Keep working harder to make more money and then keep buying more stuff.

Maybe save some along the way so that you can have a nest egg to retire on in 30-50 years.

We weren’t taught any different, and this is what we saw, so this is what we’ve known.

Oh yeah, and we were usually taught (in movies and such) that rich people are greedy, mean and selfish.

Nobody taught us about cash flow and what assets and liabilities really are.

We were taught that assets are things of value that we own. The banks helped us establish that view point. You know, items like houses and cars. Those are assets we were told. But they’re not.

That’s why I love Kiyosaki’s book, Rich Dad Poor Dad. He clears this up tremendously. To a rich person, an asset is only something that produces a positive cash flow. Period.

By his definition, a house is a liability because it does not produce income. You spend money on your house. Same goes for your car. These are liabilities.

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