Things You Don't Know About Money
We have different sorts of relationships with money, it can be good, bad, and ugly. What does a good, bad and ugly relationship with money actually refer to? Having good, bad, or ugly relationship with money does not necessarily refer to how much money you have, it is all about how you are managing your cash flow.
When you have a good relationship with money, you are managing your money well. You are not only paying your bills regularly but also have savings and investment portfolios.
When you have a bad relationship, you are struggling with your finances, your liabilities are high, you have an outstanding loan, and you are even struggling to pay your bills. However, despite having difficulties, you still have some assets and investments.
When your relationship with money is ugly, you have a huge debt. Your debt repayment is more than 40 percent of your income. You are unable to pay your bills on time, and your expenses are very high.
People who have a bad and ugly relationship with money are too afraid of money. They are always worried about money. Maintaining a good relationship has nothing to do with how much money you are making or how much money you have. It is all about how you have designed your lifestyle. If you design your life based on how much you are making, you will never have a bad and ugly relationship with your money.
Do you know Robert Kiyosaki? Have you read his book Rich Dad Poor Dad? Have you watched his interview? If you don’t know this guy and haven’t read his book or watched his interview, you are missing a lot of financial advice in your life. If you want to learn about finance and money management, you should look for his videos on youtube.
Robert Kiyosaki says you should never work for money. The number one lesson from his bestseller Rich Dad Poor Dad is “Rich don’t work for money.”
According to Kiyosaki, the people who are being screwed today are the poor middle class because they are working for money. If you are working for money, you end up paying a large portion of your money as tax. Instead of working for money, you need to make your money work for you. That’s what rich people do, that’s how rich people avoid paying a lot of taxes.
One great example is the banking system. The entire banking system does not work for money, banks make the money that they collect from the middle class to working for them. Do you know who actually benefits from this banking system? Well, not the poor class or the middle class, but the upper class. The bank itself represents the upper class.
Well, that’s not me saying it, it is Robert Kiyosaki who says so.
Robert Kiyosaki, an author of Rich Dad Poor Dad, has a company that gives personal financial advice to people and helps them to build financial literacy so that they can manage money and build financial freedom.
When you borrow money, do you pay tax on debt? Well no.
So, when they lend money, that’s how money is created. Therefore, money is debt.
Why is debt tax-free?
Because that’s how money is created
Therefore banks love it, they love when people borrow lots of money.
So, how do you get rich?
The simple answer to getting rich is to borrow money and then buy assets with it. By doing so you will be using money to make money, you are not working for money but your money is working for you. You use your profits to pay back your debt and after some time your assets will be entirely yours.
This is the reason why rich people borrow money despite sitting on a pile of cash.
When people borrow money, they use the money to buy liabilities, when they buy liabilities, they don’t have enough to pay back the debt. That’s how they end up in a debt trap.