8 Assets That Make People Rich and Never Work Again - Financial Freedom, Passive Income, Cash Flow

Summary

In the video, 'Rich Dad Poor Dad' author Robert Kiyosaki discusses the cash flow quadrant, highlighting the difference between working for money and working for financial freedom. He outlines eight assets that can lead to wealth and a life free from constant work: profitable business creation, real estate investment using OPM (Other People's Money), paper assets like stocks and bonds, commodities for long-term value, leveraging youth and time, maintaining good health, building online assets, and expanding one's network for business growth.

Takeaways

• 💼 **Business Creation**: Building a profitable business requires hard work and dedication, and it can lead to passive income and financial freedom.
• 🏠 **Real Estate Investment**: Investing in rental properties using other people's money (OPM) can provide a second income stream and lead to financial independence.
• 📈 **Paper Assets**: Investing in stocks, bonds, and mutual funds can offer a path to financial freedom without the need to manage a business or real estate.
• 🌽 **Commodities**: Investing in commodities like gold, silver, oil, and food grains can protect wealth against inflation and currency devaluation.
• ⏰ **Time Management**: Leveraging youth and time effectively by investing early can lead to significant wealth accumulation over time.
• 💡 **Skill Development**: Upgrading skills and using weekends for self-improvement can lead to better job opportunities and increased income.
• 💪 **Health**: Maintaining good health is crucial for achieving long-term financial goals and avoiding costly medical expenses.
• 🌐 **Online Assets**: Creating online assets like YouTube channels, blogs, and websites can generate passive income with minimal initial investment.
• 🔗 **Networking**: Building a strong network and personal brand can significantly impact business growth and success.
• 🔄 **Asset Diversification**: Diversifying investments across different types of assets can protect and grow wealth over time.

Q & A

What is the main difference between the left and right side of the cash flow quadrant according to Robert Kiyosaki?

The left side of the quadrant consists of people who work for money due to the need for security, while those on the right side work for freedom, aiming to not have to work hard their entire life.

How does creating a profitable business differ from working as an employee according to the transcript?

Creating a profitable business requires significant effort and sweat in the initial years, while employees tend to work hard throughout their lives. Entrepreneurs create assets that generate income passively, whereas employees live paycheck to paycheck.

What is the concept of OPM as mentioned in the script?

OPM stands for 'Other People's Money'. Robert Kiyosaki encourages borrowing money to invest in rental real estate, which can create a second income stream and help achieve financial freedom.

How does investing in real estate contribute to financial freedom?

Investing in real estate provides rental income that can cover mortgage payments and other expenses, while also potentially adding to one's income. Over time, this reduces dependency on a regular paycheck and contributes to financial freedom.

What are paper assets and how do they help in achieving financial freedom?

Paper assets include stocks, bonds, mutual funds, and GICs. They help achieve financial freedom by allowing individuals to invest in profitable businesses without managing them directly, thus providing a passive income stream.

Why are commodities considered a good investment for long-term wealth preservation?

Commodities like gold, silver, oil, and food grains are considered 'God's money' because they retain value regardless of currency fluctuations. They are irreplaceable and protect against inflation, making them a stable asset.

How is time an asset that can contribute to wealth creation?

Time is a precious resource that allows for risk-taking and learning from mistakes. Starting investments or skill development early can lead to significant wealth accumulation over time.

What role does health play in achieving financial goals?

Maintaining good health is crucial for achieving financial goals as it allows for longer periods of work and income generation. Unhealthy habits can lead to costly medical bills that erode wealth.

How can online assets contribute to passive income?

Online assets like YouTube channels, online courses, websites, blogs, and social media pages can generate ad revenue, affiliate income, or subscription fees, providing a passive income stream once they gain traction.

Why is networking important in building wealth?

Networking helps in expanding one's client base and market reach. A strong network can lead to referrals and recommendations, which are crucial for the success of any business and contribute to wealth creation.

What advice does the script give regarding starting investments at a young age?

The script advises starting investments at a young age to take advantage of compound interest and time. It emphasizes that starting early can lead to significantly more wealth accumulation compared to starting later in life.

Outlines

00:00

💼 The Path to Wealth Through Business and Investments

In the first paragraph, Robert Kiyosaki from 'Rich Dad Poor Dad' introduces the cash flow quadrant, emphasizing the distinction between those who work for money and those who work for financial freedom. He outlines eight assets that can lead to wealth and the end of reliance on a regular paycheck. The first asset is creating a business, which requires significant effort and sweat but can lead to passive income. The second is real estate investment, which can provide a second income stream and financial independence. The third is paper assets like stocks and bonds, which offer a path to financial freedom without the challenges of running a business. Lastly, commodities are highlighted as a stable store of value, protecting against inflation and currency devaluation.

05:01

💰 Diversifying Wealth Through Time, Health, and Online Assets

The second paragraph discusses the importance of time as a resource and how starting early in wealth-building activities can lead to significant gains over time. It also stresses the value of health as a foundational asset for achieving goals and the importance of investing in one's physical well-being to avoid costly medical bills. Additionally, the paragraph introduces online assets as a modern avenue for wealth creation, mentioning the potential of platforms like YouTube for generating income through sharing knowledge and skills.

10:03

🤝 The Power of Networking and Personal Branding

The final paragraph emphasizes the role of networking and personal branding in business success. It suggests that referrals and recommendations can significantly expand one's business reach. The paragraph concludes with a call to action for viewers to engage with the content by liking and subscribing to the channel, encouraging further exploration of personal finance topics.

Keywords

💡Cash Flow Quadrant

The 'Cash Flow Quadrant' is a concept introduced by Robert Kiyosaki in 'Rich Dad Poor Dad'. It divides people into four categories based on their income sources: employees, self-employed, business owners, and investors. The quadrants represent different approaches to earning money and achieving financial freedom. In the video, the right side of the quadrant is emphasized as the path to wealth and freedom, where individuals work for freedom rather than security, which is associated with the left side.

💡Financial Freedom

Financial Freedom refers to the state where one's income from investments or businesses exceeds their living expenses, allowing them to not rely on a regular job for income. The video underscores the importance of financial freedom as a goal, achieved through creating assets that generate passive income, such as a business or real estate investments, which allow individuals to stop working for money and let their assets work for them.

💡Passive Income

Passive Income is money earned with little to no effort by the recipient, such as rental income or dividends. The video mentions passive income as a key to achieving financial freedom, where entrepreneurs and investors build assets that continue to generate income without continuous work, allowing them to break free from the cycle of working for money.

💡Entrepreneurs

Entrepreneurs are individuals who start and run their own businesses, often taking on financial risks to do so. The video contrasts entrepreneurs with employees, highlighting that while both may work hard, entrepreneurs work to build assets that can earn money for the rest of their lives, whereas employees typically earn active income and live paycheck to paycheck.

💡Real Estate

Real Estate is property consisting of land and the buildings on it, which can be an asset for generating income through rental or resale. The video suggests real estate as a means to create wealth and financial freedom, especially through leveraging Other People's Money (OPM) to buy rental properties that provide a second income stream.

💡OPM (Other People's Money)

OPM stands for 'Other People's Money', a strategy advocated by Kiyosaki to use borrowed funds to invest in income-generating assets like real estate. The video explains how using OPM can help individuals to start investing in real estate even when they have limited funds, creating a second income stream that can lead to financial freedom.

💡Paper Assets

Paper Assets are financial instruments like stocks, bonds, and mutual funds that represent ownership or debt but have no intrinsic value themselves. The video discusses paper assets as a way to invest in others' businesses and achieve financial freedom without the need to manage a business or real estate.

💡Commodities

Commodities are basic goods such as metals, agricultural products, or energy. The video describes commodities as 'God's money', suggesting they hold intrinsic value and can be a hedge against inflation and currency devaluation, making them a stable asset for long-term wealth preservation.

💡Time

Time is highlighted in the video as a precious resource that can be used to create wealth, especially when invested wisely at a young age. The video emphasizes the importance of starting financial investments early, as time allows for compounding effects and recovery from potential financial setbacks.

💡Health

Health is discussed in the video as a foundational asset for achieving wealth and financial goals. Maintaining good health allows individuals to work longer, earn more, and avoid costly medical expenses in old age. The video suggests that investing in one's health is as crucial as investing in financial assets.

💡Online Assets

Online Assets refer to digital platforms or content that can generate income, such as YouTube channels, blogs, or online courses. The video points out that the internet has opened up new avenues for creating passive income streams, allowing individuals to leverage their skills and knowledge to earn money without traditional employment.

💡Network

Network refers to a person's social and professional connections. The video stresses the importance of building a strong network for business success, as referrals and recommendations can significantly expand one's client base and income potential. It ties into the broader theme of creating wealth through relationships and personal branding.

Highlights

The cash flow quadrant distinguishes between those who work for money and those who work for financial freedom.

Successful entrepreneurs create profitable businesses through hard work and perseverance.

The difference between rich entrepreneurs and employees lies in the creation of passive income streams.

Real estate investment can provide a second income stream and lead to financial independence.

OPM (Other People's Money) strategy involves borrowing to invest in rental properties.

Paper assets like stocks, bonds, and mutual funds offer a path to financial freedom without managing a business.

Commodities such as gold, silver, and oil are considered 'God's money' and a hedge against currency devaluation.

Time is a valuable asset; starting investments early can lead to significant wealth accumulation.

Investing in personal skills and education can lead to higher income and better financial opportunities.

Health is a critical asset that enables the pursuit of wealth and the enjoyment of life.

Online assets like YouTube channels, blogs, and social media can generate passive income.

Developing a strong network is essential for business growth and personal branding.

The importance of diversifying investments to create intergenerational wealth.

The concept of 'time is money' and its role in wealth accumulation.

The impact of unhealthy habits on wealth and the importance of a healthy lifestyle.

The potential of online platforms to create multiple passive income streams.

The role of personal recommendations in expanding business opportunities.

Transcripts

Rich Dad Poor Dad author Robert Kiyosaki

explained a very interesting concept he

calls the cash flow quadrant he says

there is a thin line between the rich

and the poor those on the left side of

the quadrant work for money because they

need security while those on the right

side of the quadrant work for Freedom so

they don't have to work hard their

entire life

here are eight assets that make people

rich and never work again

1. a business at some point in time all

of us have been awestruck by successful

entrepreneurs we wonder how they manage

to amass billions of dollars in one

single lifetime at times we also get

swayed by Hollywood stereotypes we feel

that the ultra Rich are corrupt and

inhumane cronies who haven't sweat a

drop in their lives but this thinking is

our biggest mental block that keeps us

poor our whole lives creating a

profitable business requires every drop

of your sweat and blood identifying a

business idea and successfully scaling

it into a multinational corporation is

no Child's Play Every self-made

ultra-rich entrepreneur in the world

including Elon Musk Jeff Bezos and Mark

Zuckerberg was made in the same way

through hard work the difference between

Rich entrepreneurs and employees is the

same as the difference between passive

and active income entrepreneurs work

really hard for the first few years to

create a business while employees work

hard throughout their lives

entrepreneurs create assets that earn

them money for the rest of their lives

without working anymore while employees

live paycheck to paycheck entrepreneurs

secure their own lives in their

children's lives while employees die

poor without leaving anything behind for

the next Generations

2. real estate while creating a business

is one of the best assets for ending up

with millions in net worth it is not the

only one all of us come from different

Financial circumstances for many of us

having a safe and secure job with

benefits is crucial to stand on our own

two feet with such constraints leaving

job security and starting a business is

not always a risk you can take however

that doesn't mean you have to break your

back throughout your life working for

someone else you can still get out of

the Rat Race if you start making the

right investing decisions at the right

time in your life

when you are young and earning an

average salary buying real estate seems

next to impossible however that's where

OPM comes in and Robert kiyosaki's words

OPM stands for other people's money

simply put he encourages people to

borrow money to buy rental real estate

such properties create a second income

stream for you other than your nine to

five job the rental income pays for

mortgage payments and other expenses

still adding some money to your pocket

also real estate investment lowers your

taxes which is like free money in your

pocket so why not make use of the tax

breaks that come with it gradually as

you start acquiring more and more rental

properties you become less and less

dependent on your next paycheck and

that's when you truly acquire Financial

Freedom you don't have to work for money

your assets work for you and if you are

smart about it you will start adding

multiple passive income streams as you

go creating wealth that you can pass on

to the next Generations

3. paper assets we all know by now that

businesses and real estate initially

require time and effort before you can

reap benefits from them most of us don't

have that much time to spare after

working for 10 to 12 hours a day in such

cases Robert Kiyosaki shares another

route to Financial Freedom it requires

disciplined spending habits but it is

much easier to start for people with a

time and money crunch instead of

spending your hard-earned money on going

to pubs and bars every week you can

invest those in stocks bonds mutual

funds and G sex each instrument has its

own risk so you can choose based on your

risk taking capacity

these assets free you from tackling the

challenges of managing a business or

real estate and at the same time they

allow you to invest in other people's

successful and profitable businesses the

more you save and invest the faster you

can get out of the rat race of nine to

five and free up your time to add

additional passive income streams to

your portfolio

4. Commodities do you know why the

dollar keeps gaining or losing value

because paper money is a man-made

concept it's not real it has value only

because the government's back it and

governments can back it because the FED

can print more of it anytime it wants

this means the dollar has no value of

its own today the US is the world

superpower so dollar is the most

valuable currency

tomorrow if some other country beats the

US to become the world's superpower the

country's currency will replace the

dollar

so saving in just one currency is never

the best asset to create

intergenerational wealth no one knows

when that piece of paper becomes

worthless to overcome all these

shortcomings of paper currency all

ultra-rich individuals invest in what

Kiyosaki calls God's money Commodities

such as gold silver oil or even food

grains and meat will remain valuable to

humankind for the foreseeable future

Commodities as an asset are

irreplaceable at the end of the day we

need food to survive we need energy to

commute and trade and we need precious

metals to store wealth paper assets

can't do these things for us with

limited quantities and stable demand

Commodities are also a great protection

against inflation therefore it is always

a good idea to diversify your portfolio

with some investments in Commodities

because they rise in value in tough

times when other assets fall five time

we've all heard the phrase time is money

do you know why it came into existence

according to economists time is the most

precious resource of humankind money

comes and goes most NFL players become

bankrupt the very next day they earn

their first million dollars but time

once gone never comes back your young

age is your best asset it allows you to

take more risks because you still have a

long life ahead of you to earn back lost

money but once you enter into old age

there is no looking back therefore

making the maximum use of your time is

essential to retiring Rich a person who

starts say investing from the age of 20

will amass much more than a person who

starts at the age of 30 even the Oracle

of Omaha Mr Warren Buffett advises

people to start young another way of

making the best use of your time is to

upgrade your skills a standard five-day

Work Week leaves you with two days to

invest in yourself you can either while

it away in movies bars or hanging out

with friends or you can work on yourself

start a side hustle upskill to get a

promotion at your job or even follow a

passion who knows what life-changing

turn any of these could lead your life

into at the end of the day wealth in any

form creates a safety ring around you

and your loved ones the true meaning of

being wealthy is no matter how the world

economics change you stay protected

6. your health while utilizing your time

well is more of a mental Endeavor being

physically fit is much needed to

accomplish all of your goals and

Ambitions most of us don't care for our

bodies at a young age we eat junk food

unhealthy restaurant food consume

unrecommended levels of alcohol or even

smoke a few cigarettes we feel that we

have worked really hard and that we

deserve some slack then we go back to

our jobs all happy ready to earn more

money so we can do it all over again

before we realize it we end up getting

trapped in this cycle not only do these

unhealthy habits eat into our current

earnings but they also leave us with

huge wealth eroding medical bills into

our old age instead if we invest in our

bodies and do regular exercise we can

not only work more and earn more but we

can live a long and healthy life with

our family and loved ones

7. online assets do you know what it

costs to start a YouTube channel

absolutely nothing it is free and have

you ever learned something cool from a

YouTube video everyone has we are all

good at something some of us cook very

well some love making others laugh and

some are computer Geniuses so why not

use your Knowledge and Skills to help

people struggling with something you are

good at and if your skills are really

sought after you will have enough

subscribers in no time and YouTube will

pay you you can even start generating ad

Revenue

similar is the case with all online

assets be it online courses websites

blogs and even your social media Pages

once your online assets start earning

you enough money you can even create a

business out of it upgrade the content

hire people to work for you and even

join affiliate programs to add to your

income streams if you're interested in

making money on YouTube be sure to check

out the free YouTube training in the

description

8. your network have you heard the

saying a happy client is a referring

client this small saying speaks volumes

about why developing a personal brand or

Goodwill is crucial to the success of

any business big or small while doing

good work can get you early success a

few recommendations from your clients

can completely shift the Paradigm for

you suppose you start a catering

business every party you cater to

enlarges your network because if the

guests like your food they will call you

the next time they have a party

therefore along with delivering quality

you also need to think of ways to Market

yourself you can't wait for success to

come your way you need to let people

know you are behind all that good work

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