so welcome back it’s robert kiyosaki
with my dear friend’s daughter here
alexa and we’re talking about
millennials and money and we’ve gone
through some lessons i don’t know how
many anymore
but um let’s continue on with another
lesson here
and so you were talking about your you
know assets and liabilities right
yeah and when you had rich dad poor dad
i said your house is not an
asset what did you think well i think
that’s a conception that many people
believe
but as you demonstrated at the last
seminar that we went to in argentina
it my mom had her properties and she
converted them into assets
correct i think it just depends on what
you do with it and it would be great if
you could show us how to turn your house
into an asset
it’s a very it’s really fundamental so i
could go back i probably covered it
earlier
but
it’s a crucial question
and this is what financial education and
financial literacy really is
again it starts with a financial
statement and i would say
probably 95 percent of all college
graduates don’t know what a financial
statement is
you took an accounting course right yeah
i did and i did parts of this
but i said young people like you there’s
six basic words
to financial literacy and financial
education
and the six words again are
income expense
asset
liability see i don’t really care about
my fico score
a fico score just basically registers
are you trustworthy with borrowing money
but a bank will never accept i borrow in
the hundreds
of millions of dollars a fico store that
could
get me there okay and so it’s kind of a
ruse i mean i don’t
it’s important but not for me so these
are the four words income expense asset
liability
and the last two words are the words
cash
flow and that’s why the game is called
cash flow
and the secret to being rich is not a
college education
but can you control cash flow
and this is what cash flowing looks like
so this here i need this
income says asset liability again this
is you get a job and this was my poor
dad go to school get a job get your phd
and so this here is cash flow so the
income comes in
and it goes out this way first line of
expense is tax
so this is a poor person’s cash flow
pattern
it’s not how much money you make
most people you know they i don’t care
if you have a phd or no school at all
but they can’t control the cash flowing
out through their expenses
and so that’s why people like suzy orman
say cut up your credit cards live below
your means
because you’re a spendaholic so that’s a
poor person
this is a middle-class person’s cash
flow pattern
and this is where the house comes in
they
first thing you know most kids do when
they get
pay raise or that they buy themselves
a bigger house oh my house is an asset
now who tells you that your real estate
agent of course
yeah right because they they want to
give you this false sense of security
while you’re getting screwed
exactly yeah but when you look at what
happens with a house a personal
i mean a personal resident something i
live in the money comes in it goes out
and this is middle class but it also
goes out through a mortgage
mortgage payments oh but i don’t have a
mortgage you still have
taxes you still you know hawaii just
raised the property taxes on me which is
probably i’m going to sell i’m going to
get out of hawaii
but you have taxes and you have upkeep
so money is always flowing out
so that’s why your house is not an asset
it’s because it’s taking money from your
so very simply said assets
put money in my pocket liabilities take
money from my pocket
and then this here is so i’m not saying
don’t buy a house
but here is a house
and i started when i was
25 bought my first house
it was an apartment it was an investment
property
i didn’t live in it i rented it out and
it put money in my pocket
so very simple the definition of asset
and liability
is not the house of this it’s cash flow
where is the cash flowing
so as a young person and to all
millennials or if you’re old
financial intelligence is the ability
to control cash flow
and that’s what they don’t teach you at
school they tell you to go to school get
a job
first thing is tax
you know you’ll pay most of your money
will go out through taxes
in your lifetime and then they tell you
to buy a house
and a car a car is an asset no the car’s
a liability got insurance gas
upkeep and all this now if you buy a
a taxi car it could be an asset it’s
cash flow
and that’s very simply it so this is a
poor person
money goes out there’s a lot we just
interviewed some national football
league players who make millions of
dollars in their 20s
and most of them are broke in two years
because they can’t control
cash flow intelligence iq
is can you control cash flow not your
college degree
college degrees are important but
they’re not going to teach you this so
the cash flow game
trains you over and over and over and
over again to get your money in here to
get cash flow
this way so i started with this
it cost me eighteen thousand 000
i paid for the credit card and i put 25
in my pocket
okay it’s an infinite return because the
cash flow paid for the mortgage it paid
the expenses pays the operating cost and
i still made 25 dollars
kim’s first deal was the same shares was
an 18 000. it was fifty thousand
forty five thousand and they put twenty
five dollars in a pocket
but kim now owns six thousand five
hundred
rental properties and she pays no tax
because the income comes from here
if you have a job you pay tax but income
the rich get richer
because when you have asset income
taxes are less you can get it down to
zero if you want but that’s financial
intelligence but can you can control
cash flow
okay so say it again asks us what assets
put money
into your pocket liabilities take money
out of your pocket
and so as a young person just focus on
that so when you’re buying a new house
you got to say
is this going to take money or put money
you buy an apartment house
is it going to take money or put money
that’s it it’s cash flow
66 most important words for
financial intelligence and iq is income
expense
asset liability but it’s really cash
flow now if i could bring up a more
horrible subject
is do you think people can be assets or
liabilities
i think they could be both to be honest
so for most young people they
fall in love they get married they have
kids it’s a child and asset a liability
a child is definitely a liability i’m
not saying don’t have kids
but you got to think the kid is
expensive
and they don’t get cheaper they get more
expensive every year
you know then they go to college and
then it gets even more expensive
so a human being and that sounds
horrible to all the socialists and
communists out there
but the fact is kids cost money but as
an old guy i want you to think about
this
as i get older
as people get older family members
become liabilities
so i have a friend whose mother
thank god she had long term i don’t know
what they call it but they just
cancelled it on her
she can go to a old age home
and i think the price is 18 000 a month
most so that as a young person as your
parents get older the question is can i
afford
to spend thousand dollars a month on my
mom or my dad’s
long-term health care yes or no
no not right now no so and this is going
to happen to my generation
many people don’t realize but their
brothers or sisters or sisters kids and
all this become liabilities for them
so as a person is fairly well off
i’m and kim and my friends
are thinking about
two-legged liabilities so i know today
that if my sisters become ill
i’m the one with the money and it’s my
responsibility to pay for them
same as my brothers and their kids so
these are things that people don’t think
about a lot of times
is what happens not only as they grow up
but what happens as they age
statistics show the average person like
my generation
let’s have a million dollars eighty
percent of that million dollars will be
gone
the last two years of life because
medical expenses go through the roof
and today insurance companies are
canceling i forget the name of it
but my friend’s mother it was just
cancelled so he doesn’t have 18 000 a
month
so he had to bring his mother into his
house and you know
create another room and all this is well
i love her what she does
but she’s a big liability and all he had
was savings so the savings are being
depleted going out this way
okay so but your question about houses
and people but people are house assets
and liabilities
for most people with our favorite
subject
a 401k is an asset a liability from what
i’ve learned from you it’s definitely a
liability
or an irra or a pension because it’s
always going out this way
there’s no guarantee it’ll be there so
this is the basic of financial
intelligence financial literacy
stuff like this another thing about
people
is you have a bad advisor like a bad
financial planner or a crook or a
business partner as a crook
a wife that’s a crook and all that there
could be human liabilities
i have two friends right now who just
joined a million dollar club
they married beautiful women
got divorced and the women is now
costing
a million dollars a year in alimony so
their beautiful wife and the child
support it’s a million dollars going
and she’s only 40 years old so she has a
whole pile of boyfriends
but it’s costing him a million dollars a
year for her boyfriend’s i said i want
to be her boyfriend
not really you know that makes sense to
you
yeah it makes sense financial iq is can
you
control cash flow iq means
how big a problem can you solve so if
like my friend whose
mother is now costing him 18 000 a month
well thank god he has about a hundred
thousand in savings
but in one year it’s gone yeah that’s
not
high iq but with for myself
eighteen thousand dollars a month i can
go make that much cash flow pretty
easily
yeah okay so when you’re like in your
twenties per second well how am i going
to make let’s say
by the time you have probably a hundred
thousand a month to take care of my
parents
because like it or not it’s cash flow
and they become liabilities and it’s the
problem is getting worse
i won’t because the bond markets are not
providing income
so many insurance companies have to
renege on their promises to provide the
cash flow to take care of our loved ones
the same as medical and so that’s why
when people say i’m going to go out on
my own and do all these things
they’re kind of doing what they love
which is good but they’ve really got to
think about
how many liabilities do they have it’s
not just your rent
you know it’s your family and so for me
and for kim we have family members
but they’re liabilities so that’s why we
stay over here
hopefully nothing will go wrong but if
one of my sisters got ill and she needs
a hundred thousand a month at least i
can provide it
yeah otherwise [ __ ] they go they go in
indigent whatever they call it okay yeah
and the comments or questions
no thank you for sharing so much about
this content and all this information
that’s going to be super valuable for
all my friends and all the millennials
out there just like me
i said i have two friends from now on
the million dollar a year club it
doesn’t mean they’re making a million
dollars is their wives
are taking a million dollars a year out
of their pocket and their kids and all
this
and i go you should have thought about
that 20 years ago but you don’t because
you’re in love and you’re going to have
kids and
you’re going to make it together but
your parents are
great role models so once again the six
words you have to know and be masters of
income expense asset liability cash
flow you can control cash flow that’s
financial intelligence financial iq
and financial literacy okay okay thank
you
sourcehttps://www.youtube.com/watch?v=A8vD_XO0vUU