RULE TO RICHES

Rule One.: You must know the difference between an asset and a liability, and buy assets.
If you want to be rich, this is all you need to know. It is Rule No. 1. It is the only rule.
This may sound absurdly simple, but most people have no idea how profound this rule is.
Most people struggle financially because they do not know the difference between an asset and a liability.
"Rich people acquire assets. The poor and middle class acquire liabilities, but they think they are assets"

Why would someone buy an asset that was really a liability. The answer is found in basic education.

We focus on the word "literacy" and not "financial literacy." What defines something to be an asset, or something to be a liability are not words.

In fact, if you really want to be confused, look up the words "asset" and "liability" in the dictionary. I know the definition may sound good to a trained accountant, but for the average person it makes no sense. But we adults are often too proud to admit that something does not make sense


An asset is something that puts money in my pocket.

 A liability is something that takes money out of my pocket.

This is really all you need to know.

 If you want to be rich, simply spend your life buying assets.

If you want to be poor or middle class, spend your life buying liabilities. It's not knowing the difference that causes most of the financial struggle in the real world.

Illiteracy, both in words and numbers, is the foundation of financial struggle. If people are having difficulties financially, there is something that they cannot read, either in numbers or words.
Something is misunderstood.

The rich are rich because they are more literate in different areas than people who struggle financially.
So if you want to be rich and maintain your wealth, it's important to be financially literate, in words as well as numbers.

Because students leave school without financial skills, millions of educated people pursue their profession successfully, but later find themselves struggling financially.
They work harder, but don't get ahead. What is missing from their education is not how to make money, but how to spend money-what to do after you make it.

 It's called financial aptitude-what you do with the money once you make it, how to keep people from taking it from you, how long you keep it, and how hard that money works for you.
Most people cannot tell why they struggle financially because they don't understand cash flow.
A person can be highly educated, professionally successful and financially illiterate. These people often work harder than they need to because they learned how to work hard, but not how to have their money work for them.