Assets Over Cash

NAVIGATING THE CHANGING FINANCIAL LANDSCAPE

In the world of finance, we're often told to follow the crowd when it comes to investing. But what if the crowd is heading towards an uncertain fate? Let's explore this crucial difference in our approach to building wealth.

📖 The Tale of "The Cage Bird and the Bat"

In this technologically advanced era, valuable life lessons from the past still hold great wisdom. One such lesson comes from the fable "The Cage Bird and the Bat" found in the Harvard Classics. The story revolves around a bird in a cage that sings only at night to avoid capture during the day. When a free-flying bat questions the bird's behavior, the bird explains its precautionary measure. The bat replies, "It is no use your doing that now when you are a prisoner: if only you had done so before you were caught, you might still have been free".

The message is clear: taking precautions when we are already in a crisis is futile. By then, we are already trapped. Precautions must be taken before the problems arise. Our world is rapidly moving towards a crisis, and though we may be caught in the net, we are not fully trapped in the cage yet. Economic bubbles are bursting – the stock market, the housing market, and the illusion of wealth based on credit.

Let's learn the principles from the teachings of "Rich Dad Poor Dad" and focus on building your asset column!

✅ Buy Assets, Not Liabilities:

Remember, an asset puts money in your pocket, while a liability takes it out. When making financial decisions, consider whether the investment will generate income or simply drain your resources. Shift your mindset and prioritize acquiring income-generating assets to boost your financial well-being.

For example, instead of buying a luxurious car that only adds to your expenses, consider investing in a rental property that generates monthly rental income. This way, you have an asset that grows your wealth.

✅ Build Wealth, Not Just Net Worth:

Instead of solely focusing on your net worth (the value of your assets minus liabilities), shift your attention to building wealth.

Wealth is measured by how long you can sustain your lifestyle without relying on active income. By building alternative income streams through investments and businesses, you can create financial security and true freedom.

As an example, building a successful online business that generates passive income can provide you with the freedom to pursue your passions and spend time with loved ones without worrying about money.

✅ Buy Assets First, Luxuries Last:

As you progress on your financial journey, resist the temptation to indulge in luxurious purchases right away. Prioritize acquiring income-generating assets first, which can provide a steady stream of passive income. Use the income generated from your assets to fund the luxuries you desire. This approach allows you to enjoy the finer things in life without compromising your long-term financial well-being.

For instance, rather than immediately buying designer clothes or expensive vacations, focus on building a portfolio of dividend-paying stocks or real estate investments. The income generated from these assets can eventually fund your luxurious experiences.

✅ Always remember to PAY YOURSELF FIRST:

Before paying bills or expenses, set aside a portion of your income for savings and investments. This habit ensures you prioritize your financial future and build wealth over time. Don’t spend your time working for your company, pay tax to the government, pay interest to the bank, then pay yourself last.

✅ MIND OUR OWN BUSINESS:

Focus on building assets that WORK FOR YOU. Whether it's a successful business that runs without your constant involvement, royalties from creative works, income-generating real estate, or smart investments in stocks and bonds, these are the pathways to financial freedom.