Cash Flow vs Account Balance

The FireValt Blog (http://www.firevalt.com/blog/2006/04/28/cash-flows-vs-account-balances/) tried to compare the important of Cash Flow with Account Balance, and concluded that Cash Flow has more importance in building wealth. What’s more important – having a large bank account balance or a healthy positive cash flow each month? I’m sure both are important, but which one should we focus our attention on when budgeting? Should we budget and plan based on money in our bank accounts? The amount in a bank account is the least important factor…

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Is Cash Flow better than Capital Gain?

My co-worker and I were driving past the construction site of a high end condominium near to our work place.  Naturally, the conversation shifted to the condominium and my co-worker muttered that if he has the money, he would seriously consider buy a unit although his current place is less than 3 years old.  He was speculating that the property price will go and in a few years time, he would be able to sell it off for a tidy…

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Income and Expense

To reach our financial goal, one of the first things that we should do is to figure out what is our financial situation, so as to better chart our path.  And to do that, we need to determine what are the monthly flow of cash into our pocket and the monthly flow of cash out of our pocket.  That is our income and expenses, which will define our cash flow. Income  Income is money that goes into our pocket.  Some…

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Investor and Gambler

Ariffmahmood in his/her blog (www.bizliner.net/finance/?p=10) discussed about active and passive income with relative to Robert Kiyosaki famous Casflow Quadrant. The author mentioned that to become rich, it is necessary to switch from an active income earner to a passive income earner.  And one way is to become an investor as in the I quadrant of the Cashflow Quadrant. The author then questioned the difference between an investor and a gambler. In my opinion, I see that the primary difference between an investor…

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How to Teach Your Children the Value of Money

In the book “Rich Dad, Poor Dad”, Robert Kiyosaki was taught financial knowledge from a young age of about 9 years old by his Rich Dad.  This laid a strong foundation for him which benefited him later in life. You do not have to simulate Robert Kiyosaki and his rich dad and waited until your children is 9 years old before you can teach you children financial related knowledge.  As long as your children start to understand what is money,…

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Top 6 personal financial obstacles – Part IV

Robert Kiyosaki listed 6 top personal obstacles that can block your path to financial success.  In the previous 3 installments, I have covered 4 of them.  In this last installment, I will be talking about the rest of the 2 personal obstacles – Arrogance and Disappointment. Arrogance Robert Kiyosaki’s definition of arrogance is ego plus ignorance.  The ignorance is hidden behind the ego.  Because of the ego, many people will try to bluster their way through financial discussions when they…

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Does U.S. Need Secretary Of Personal Finance?

Robert Kiyosaki’s “Rich Dad, Poor Dad” book illustrated the importance of financial literacy and exposed the low level of financial literacy in the US. While Office of Financial Education was created in 2002 in the US with the objective to improve on the financial literacy, Nathan Dungan argued that it has not shown results He wrote in KCCI.com Money column: A few weeks ago, I was flying back to Minnesota, my home state, after doing a workshop for a large community organization and the…

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Top 6 personal financial obstacles – Part III

Robert Kiyosaki in his book “Rich Dad, Poor Dad” listed 6 personal obstacles, which can block the financial success of even the most financially literate. In the previous 2 articles, I have talked about 2 of these personal obstacles.  They are Fear and Cynicism. In this article, I will cover the next 2 obstacles, which are Laziness and Bad Habits. Laziness Who are the laziest people in the world?  Busy People! Robert Kiyosaki proclaimed that busy people are often the…

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Top 6 personal financial obstacles – Part II

In the previous article, I listed the top 6 personal obstacles quoted by Robert Kiyosaki, which can potentially prevent even the most financially literate from reaching their success goal. They are: 1. Fear 2. Cynicism 3. Laziness 4. Bad Habits 5. Arrogance 6. Disappointment I went on to talk about the first obstacle, Fear.  The fear of losing money and how the rich and the poor managed their fear differently.  I will continue with the next obstacle in this article….

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Top 6 personal financial obstacles – Part I

One of the key to riches is to be financially literate.  This was what the Rich Dad taught in Robert Kiyosaki’s “Rich Dad, Poor Dad”. Does wealth then come automatically once you became financially literate? Not necessarily and not certainly.  Robert Kiyosaki believes that despite attaining a certain level of financial literacy, personal obstacles can prevent even the most financially literate from attaining their financial goal.  These people will still continue to work a full time job, living from paycheck…

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