Rich Dad Poor Dad, By Robert Kiyosaki Flashcards
(29 cards)
Asset
an asset puts money in my pocket (whether I work or not).
Liability
a liability takes money out of my pocket.
Income Statement
aka Profit and Loss Statement, it measures money in and money out
Balance Sheet
balances assets against liabilities
401(k)
A U.S. retirement plan developed by the ERISA Act of 1974 when companies realized they could not provide for retirees’ health care.
Cash Flow
Cash coming in (as income) and cash going out (as expenses). It is the direction of cash flow that determines whether something is income, expense, asset, or liability. Cash flow tells the story.
Financial Aptitude
What you do with the money once you make it, how to keep people from taking it from you, how to keep it longer, and how to make that money work hard for you.
Income
The money that is received as a result of the normal business activities of an individual or business.
Mutual Fund
A variety of stocks, bonds, or securities grouped together, managed by a professional investment company and purchased by individual investors through shares. The shares possess no direct ownership value in the various companies.
Social Security
A social welfare or social insurance program commonly funded through automatic payroll deductions to subsidize persons in their old age.
Bond
A debt security in which the authorized issuer owes the holders a debt and is obliged to repay the principal and interest at a later date, termed maturity.
Entrepreneur
Someone who creates a system to offer a product or service in order to obtain a profit. Entrepreneurs are willing to accept a level of risk to pursue opportunity and are viewed as fundamentally important in the capitalistic society.
Financial Statement
A statement of your income, expenses, assets, and liabilities. Your “report card” when you leave school and what your banker wants to see before lending you money.
Stock
The capital raised by a corporation through the distribution of shares.
The following are REAL ASSETS…
-Businesses that do not require my presence
-Stocks
-Bonds
-Income-generating real estate
-Notes
-Royalties from intellectual property
-Anything else that has value, produces income or appreciates, and has a ready market
Financial IQ is Made Up of the following 4 Items
1.- Accounting: Accounting is financial literacy or the ability to read numbers. This is a vital skill if you want to build businesses and investments.
2.-Investing: Investing is the science of “money making money.”
3.-Understanding Markets: the science of Supply and Demand.
4.-The Law: The law is the awareness of accounting corporate, state, and federal regulations.
To be a successful investor, learn these 3 skills:
1.-Find an opportunity that everyone else missed
2.-Raise Money
3.-Organize smart people
Tax Advantages of Corporations
A corporation earns, spends everything it can, and is taxed on anything that is left. It’s one of the biggest legal tax loopholes that the rich use.
1031
Jargon for Section 1031 of the Internal Revenue Code, which allows a seller to delay paying taxes on a piece of real estate that is sold for a capital gain through an exchange for a more expensive piece of real estate.
Corporation
Merely a legal document that creates a legal body without a soul. It’s not a big building or a factory or a group of people. Using it, the wealth of the rich is protected.
Financial IQ
Financial intelligence that comes as a result of financial education. People with high financial IQ learn to use other people’s money to become rich.
Financial Literacy
The ability to read and understand financial statements, which allows you to identify the strengths and weaknesses of any business.
3 Main Management Skills Needed for Success
1.Management of Cash Flow
2.Management of Systems
3.Management of People
5 Main Reasons Why Financially Literate People Do Not Become Wealthy
1.Fear
2.Cynicism
3.Laziness
4.Bad Habits
5.Arrogance
