Richdads-CASHFLOW-Quadrant-

CASHFLOW Quadrant
• “Your house is an asset.”
• “The price of real estate always goes up.”
• “Blue-chip stocks are your best investment.”
• “It takes money to make money.”
• “Stocks have always outperformed real estate.”
• “You should diversify your portfolio.”
• “You have to be dishonest to be rich.”
• “Investing is risky.”
• “Play it safe.”
I sat there deep in thought, realizing that most of what I heard
about money at home was really people’s opinions, not facts.
“Is gold an asset?” asked rich dad, snapping me out of my
daydream.
“Yes. Of course,” I replied. “It’s the only real money that has
withstood the test of time.”
“See, there you go again,” smiled rich dad. “All you’re doing is
repeating someone else’s opinion about what is an asset rather than
checking out the facts.”
“Gold is only an asset, by my definition, if you buy it for less than
you sell it for,” rich dad said slowly. “In other words, if you bought it for
$100 and sold it for $200, then it was an asset. But if you bought one
ounce for $200 and you sold it for $100, then gold in this transaction
was a liability. It is the actual financial numbers of the transaction that
ultimately tell you the facts. In reality, the only thing that is an asset or
liability is you, because only you can make decisions that make gold an
asset or a liability. That is why financial education is so important. I’ve
seen so many people take a perfectly good business or piece of real estate
and turn it into a financial nightmare. Many people do the same in their
personal lives. They take hard-earned money and create a lifetime of
financial liabilities.”
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