Why The Rich Get Richer?
Ever wonder why the rich get richer and the poor get poorer? According to Robert T. Kiyosaki, the financial statement of the rich looks like this as shown.
In this financial statement, we have two rectangular boxes. The upper one is the Income and Expense statement and the lower box is the Asset and Liability Statement.
The two lines with arrows, one red and one blue indicate the sources of how the money flow in and out of the rich people. Let's take the red arrow for example, the red arrow arrow indicates the money from business. The profit from the business will come into the financial statement as income. The rich people will use this source of money to buy an asset, in this case stocks of a blue chip company. This asset that is bought will in turn generate another source of money that contribute to his Income side of the financial statement through dividends from the stocks or sale of stocks after the price of the stocks has gone up.
How the rich get richer is that they are always generating money into them because they understand their financial statement so well. Instead of buying liabilities to make themselves poor. They think of ways to generate money into their financial statement to make them rich.
As long as there is more arrows with different colours representing different sources of money flowing as shown in the financial statement above, you can be sure you are going to get richer.
"Rich Dad Poor Dad" By Robert T. Kiyosaki with Sharon L. Lechter, C.P.A
http://www.richdad.com/
