Start Here:
I will begin this book by outlining what keeps us poor. We grew up believing that showing off is the only proof of success. This has lead us into thinking when you have some money, buy to show off. We do not consider the detriment whatever we buy has on our financial standing.
Another shaper of our thinking and behaviour is the media, the media always portray success as having expensive materials. Which further makes us believe in showing off success. As you will see, we need to turn things around to achieve wealth.
As a result of the media and the teachings, both explicit and implicit. We see having liabilities as being successful. Take for an example owning a private car. The car that doesn’t function to get you income is a liability. Most of us young people, when we first get a salary we rush to buy a car, probably to show we have made it. To be wealthy you need to buy the cheapest car you can. It doesn’t mean you must buy a “scrap”. Buying a cheaper vehicle will allow you to cash flow and thus allow wealth creation.
We are so unfortunate that education has been a commodity. Actually i can go as far as calling it a liability in our times. Education has become synonymous with debt rather than investment. Student loans are among the the debts that keep us poor. Finishing university or college, having to pay education debt keep us poor.
Credit cards also keep us poor. We haven’t been taught a correct way to use credit cards. We see a credit card as free money. Even those who see it as debt, subconsciously they see it as a lifeline instead of something to take advantage of, and accumulate free points that can be used to discount some services. The credit card is not inherently bad, it is the way we use it.
One of the things we don’t understand is that something that doesn’t make you cash flow, i.e something that takes money out of your pocket and reduces cash flow is a liability. Let’s say you currently stay in a house that you paying a mortgage, insurance, utilities, taxes for. The house that you not getting anything as as income every month from. It is a liability.
yes , a mortgaged house is an asset to the bank and a liability to you, Unless it cashflows. Do not ever believe in the statement that says you have an asset in a house/home that you paying for. The mistake we make is to think the real estate only appreciates in value, there is nothing like that. So never assume your house is an asset, if it loses you money, it’s a liability.
Another subtle thing we do is taking insurance for things we have insured already and for things we do not need to insure. You need to go through all your insurance policies, see what you have double covered. You will be surprised to find that you giving away the money you shouldn’t be giving away. Let’s take for an example medical aids. Why not use the same model used by medical aids to cover yourself, in other words do not cover yourself for diseases you don’t have and have a low risk of developing. You giving away money. Let’s take this further.
The banks use your savings to make money. This is also what keeps us poor. You can do the same. You can be your own bank or atleast make your money work for you. It is possible and i will show you how. The bank takes your savings and loan it at higher interest to you and make more money. Your savings, makes money from you for the bank. I will clarify this on the coming sections. Follow me you will be liberated.
Strive to do away with savings and checking accounts. They don’t do anything for you other than helping you to move money. Worse of all it helps banks make money from you and others, but you get compensated with peanuts.