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Chapter Four | The 8 Integrities of Business<br />
Rich dad would say, “Cash-flow management is a fundamental and essential skill if a<br />
person truly wants to be successful in the B and I quadrants.” That is why he insisted<br />
that I read financial statements of other companies.<br />
In fact, he spent most of his time teaching us to be financially literate. He would say,<br />
“Financial literacy allows you to read the numbers, and the numbers tell you the story<br />
of the business, based on facts.”<br />
If you ask most bankers, accountants, or loan officers, they will tell you that many<br />
people are weak financially simply because they are not financially literate. I have a<br />
friend who is a respected accountant in Australia. He once said to me, “It is shocking<br />
to see a perfectly good business go down just because the owners are not financially<br />
literate. Many small business owners fail because they do not know the difference<br />
between profit and cash flow. As a result, many very profitable businesses go broke.<br />
They fail to realize that profit and cash flow are not the same things.”<br />
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