What is "The Commodity of Kings"
"Power is simply "the ability to act." Since ancient times, power has been the commodity of kings. Power originally came to those who were strongest physically. Later, it came to those who had a special heritage through royalty. More recently, it came to those who had the greatest wealth or capital. Today, those who possess specialized and valuable knowledge have the greatest capacity for power." Anthony Robbins - from his book Unlimited Power
Specialized and valuable knowledge.
In lesson 1, we learned that there are only two things that can prevent you from becoming wealthy. You don't know how, or you are unwilling to apply what you know. Today we will dive into reason number one.
Simply put, chances are, you were never taught how to become wealthy. Think for just a moment, what is it that separates you from the Donald Trumps of the world or for that matter any mega-wealthy person?
Is it time? No! we all have the same 24 hours in each day. As you will learn, how you spend your 24 hours will make all the difference however.
Is it a privileged background? Not at all. Remember rags to riches require rags to begin with.
Ah Ha! It must be education! Absolutely not! At least not in the traditional sense. When we think of education most of us think about going to school, graduating, possibly attending college or graduate school so we can graduate and get a good "JOB". Traditional education teaches us to become a productive part of the workforce, but in no way teaches us the basics of wealth! You may remember going to algebra class, or studying a foreign language, or history, or economics.
How many times have you gone to Wealth Building 101, or advanced personal financial success? Never we suspect, and if you happen to have attended classes you feel were teaching wealth building, doesn't it make sense that your instructors should have been wealthy? Were they?
Did you know that Fred Smith, founder of Federal Express, received a "D" on his term paper. The one that outlines the worlds first overnight package delivery service! AKA Fed_Ex
Avis of AVIS car rental, McDonald of McDonald's hamburgers, Colonel Sanders of Kentucky Fried Chicken, Lear of Lear Jets, Henry Ford, and Abraham Lincoln all have one thing in common - They never graduated HIGH SCHOOL!
So much for traditional education!
The fact is, the specialized and valuable knowledge of wealth building is self taught. The good news is it's simple to understand and enjoyable to learn, and if you apply that knowledge, you will begin to create wealth.
Welcome to your first day of class, wealth building 101.
How did the majority of people who are wealthy get that way?
If you knew you had a 74% chance of wining would you buy a lottery ticket? Millions of people line up each week to purchase lottery tickets for their chance to become wealthy. However, according to the U.S. department of Health and Welfare, less than 1% of all wealth in America was created by lottery winners.
What if you could Beat The Odds!
74% of all wealth in America was made just one way; by starting and owning your own business. If you own your own business, the chances of you becoming wealthy are 284% grater than any other way wealth is created. This includes all other methods of becoming wealthy, from Pro sports figures, to astute investors, to lottery winners! It makes absolute sense that if you goal is to become wealthy, you must have your own business!
So we have now learned that the greatest opportunity to become wealthy is through owning your own business.
The second set of specialized and valuable knowledge is an entirely new way to look at your personal finances.
Robert Kiyosaki in his blockbuster #1 best-selling book developed a completely new and simplified way to understand your personal spending and earning patterns, and how they lead you closer to or farther away from becoming wealthy. To explain these cash flow concepts in more detail.
The following information is gathered from his book Rich Dad Poor Dad - What the rich teach their kids about money that the poor and middle class do not! and Robert's website: http://www.richdad.com
Financial Statements
Rich Dad said, "The riskiest investor of all is a person who is out of control of his or her personal financial statement. These are people who have nothing but liabilities that they think are assets and as much in expenses as they have in income and whose only source of income is their labor."
Understanding your Financial Statement is the foundation for taking control of your personal finances. Rich Dad believes the relationship between the Income Statement and the Balance Sheet was everything. What is the first step to financial freedom? Take control of your Financial Statement.
Cash Flow Pattern of the Poor (or a young person still living at home): The poor spend every penny they make and they have no assets or liabilities, only expenses. The cash flow is limited to income and expenses and the cash flow pattern of the poor reflects income from a job that is used to pay expenses like rent, food, clothes, transportation and taxes.
Cash Flow Pattern of the Middle Class: Individuals in the middle class accumulated more debt as they become more successful. A pay raise qualifies them to borrow more money from the bank so they can buy personal items like bigger cars, vacation homes, boats and motor homes.
Their wage income comes in and is spent on current expenses and then on paying off this personal debt. As their income increases, so does their personal debt. This is what we call the Rat Race.
Cash Flow Pattern of the Rich: The rich have their assets work for them. They have gained control over their expenses and focus on acquiring or building assets. Their businesses pay most of their expenses and they have few, if any, personal liabilities.
An individual's cash flow pattern may show a combination of these three types. Which pattern does your financial statement reflect? What story does your financial statement tell? Are you in control of your expenses?
As you can see, the poor, middle class and rich, have dramatically different cash flow patterns. The poor and middle class work for income and either spend their money on necessities or servicing and ever increasing debt load; while the rich have their money or assets work for them, and re-invest their income into additional income producing vehicles.
Part of becoming financially fit it to get the ball rolling. You may be asking yourself, "How can I invest the income I make into income producing assets when I spend most or all of my income already on necessities and debts?"
In tomorrow's lesson we will show you how to immediately put additional cash in your pocket, this month, without changing your job, asking for a raise, or taking profit from any business you choose to start! In fact tomorrow we will show you how it's possible to fund your first income producing asset with cash left over to help with the monthly budget!
That's all for today's Lesson.
Here are the key points to remember from today's lesson:
Where building wealth is concerned, a formal education is not necessary, and does little to prepare you to become wealthy. 74% of all wealth in America was made just one way; by starting and owning your own business.
Your greatest opportunity to become wealthy is through owning your own business.
The poor, Middle Class, and the Rich, have dramatically different cash flow patterns and spending habits.
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