![]() ![]() Rich dad’s cash flow pattern of the middle class Often the results are financial devastation. If a poor person loses a job, they have little-to-no cushion to carry them. They are hard workers, often doing two jobs just to make ends meet, but they have a hard time getting ahead because they are simply treading water.Īs the image of the cash flow statement shows, money comes in and immediately goes out the door to pay for expenses. You'll often hear those who struggle mightily when it comes to finances say, "I'm living paycheck to paycheck." The unfortunate reality for those who are poor is that they make hardly enough to pay their monthly expenses. Those of the poor, the middle class, and the rich.īecause he liked to show things as simply as possible, he created simple examples of cash flow statements in the form of illustrations, which I will share with you in this article. Rich dad taught me that there are three cash flow patterns. If you’re going to be financially secure, however, you need to learn to have more cash flow into your pockets. Today, many people are in financial trouble because they have too much cash flowing out of their pockets and very little money flowing into their pockets. Now you know the importance of cash flow. If that income went away, what would you do? What would happen to you? Then cover up all the income that doesn’t come in the form of cash flow, and see how many beats your heart skips. Cash flow is money that flows into your pocket, automatically, on a regular basis.Īn enlightening exercise is to list out all your expenses in one column and your income in another. Cash flow is not the extra money you make busting your butt on the weekend driving people around for Uber. Money you don’t have to work for by trading your time. When I want to assess the financial health of a business or a person, I look first at their cash flow.īy cash flow, I mean passive income that comes through business or investments. But if you don’t have cash flow, you’ll quickly lose it all. You can have an impressive balance sheet. You can have the best ideas in the world. Rich dad said, “The most important words in business and investing are ‘cash flow.’” New Rule of Money #3: Learn How to Control Cash Flow ![]()
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