How can I become rich?
Posted December 3, 2009on:
Once, there was a man who kept on praying: Oh God, please help me to win lottery this time. I beg you, please help me win this time. Finally, God listened to him and sent an angel.
The angel told the man:
God is willing to help you, you will win lottery. However, there is one condition.
The man asks the angel: What is that condition? I will fulfil all the conditions.
Please, buy the ticket of the lottery first!
‘PEOPLE WANTS TO GO TO HEAVEN BUT VERY FEW WANT TO BUY A TICKET’ (Anonymus).
Do you really want to become rich? In a seminar, we were told by the speaker:
‘The simplest way to double your money is to take out a hundred rupee note, stretch it fully, pick it from one side and put that side on the other side of the note. Now its ‘double’. Put it back in your pocked, folded, doubled….’
The book ‘Cash Flow Quadrant’ by Robert Kiyosaki does not offer any quick fix solution. It provides with a seven step guide towards changing cash flow quadrant i.e. from moving towards better cash flows (out of which you will find three described below today)
1. MIND YOUR OWN BUSINESS
First step: Where Am I NOW?; Where are we standing on our financial front?
Fill out your own personal financial statement. Here is a very simple sample. You can download this and take some time to fill and see, where do you stand NOW!
Second step: Set Financial Goals
Where would I see myself in next 12 months in terms of my savings? What is my goal in next twelve months?
– I want to decrease my debts by _____________________
– I want to increase my cash flows by ___________________
What is my financial goal in next 3 years?
2. TAKE CONTROL OF CASH FLOWS
Golden rule of personal finance: ALWAYS PAY YOURSELF FIRST
At times, more money makes people poor. Why? They get more debt with every pay raise!!!
Majority of people do not prepare their own financial statements of future. Set aside a set percentage from each paycheck or from any other payment you receive from other sources. Deposit that money into an investment saving account. Once your money is in investment saving account, don’t take it out till you are ready to INVEST it. Another thing: Focus on reducing your personal debt.
3. KNOW THE DIFFERENCE BETWEEN RISK AND RISKY
People say: Investing is risky. However, investing is not risky, being uneducated is risky.
THE DIRECTION OF CASH FLOWS IS EVERY THING. . If your assets put money in your pocket, you will become rich. But if you rely on traditional definition of asset, you will not have enough assets to pay your liabilities.
ACTION POINT: Can you commit only three to five hours of your time, once a week, to educate yourself on finance? How? By reading business papers, listening to educational cassettes on investing and financial education and reading magazines / newsletters on personal finance?
Other four steps to be discussed tomorrow.
Take part in poll. Contribute your thoughts. Put your comments. Share your experience. Use sample income statement and keep on reading.