Hey Carl, I’m gonna teach you how to be rich using what I learned from the book Rich
Dad Poor Dad!
Everything we own either helps us become richer, or makes us poorer.
Something that makes us richer is called an asset.
Whereas something that makes us poorer is a liability.
The formula to getting rich is having as many assets, and as little liabilities as possible.
I know, it sounds simple, but the most important concepts are often simple, so don’t take
it lightly.
Once you learn how to make a dollar, becoming a billionaire just means doing the same thing
a billion times.
You’re probably thinking, if I make 10 dollars an hour, that means I have to work 100 million
hours to be a billionaire.
When you get paid for the amount of TIME you work, that is called active income.
So if you are thinking in terms of active income, you’re probably right, you’ll
die before you even come close to a billion, unless you’re in the top 1% of your field,
like hollywood celebrities or pro athletes.
But there is another type of income, called passive income, that makes money for you while
you sleep.
Before I get into what passive income is, let's go back to assets and liabilities.
So let’s say a house.. is it an asset or liability?
It depends, if you live in that house and you’re losing money every month from bills
and mortgage payments, then it is a liability.
If on the other hand you rent it out, and you receive more money than what you have
to pay to KEEP the house, then it is an asset!
One of my buddies pays $1000 a month for his condo unit, which includes utilities and everything,
so $1000 in total.
He rents it out half of his place for $1200 (don’t ask me how he does it), so not only
does he live there for free, he actually makes $200 every month.
That makes his condo unit an asset.
The $200 he makes is passive income because he doesn’t have to actively spend his time
in order to make that money.
Once you can make passive income, all you have to do is repeat what you’re doing.
Since passive income isn’t proportional to your time, you can make as much money as
you want per hour!
Imagine if my buddy rents 9 more condo units.
If he makes $200 each month from each of those, he’ll make $2000 a month.
At that point, his business model will be a bit more complicated, sice he’ll probably
have to hire a few people to do jobs like cleaning, finding people to rent to, and taking
monthly payments.
So let’s say it costs $1000 a month to hire people to do those things.
He’ll still be making $1000 a month from doing nothing.
If you eventually expand to over a thousand houses, you’ll have to hire more people.
Perhaps you’ll hire a cleaning manager for every 10 cleaners, and a senior manager for
every 10 managers.
That’s essentially how businesses operate, you have a CEO at the top, with multiple-level
managers, all the way down to each individual worker.
Learning how to keep your money, is just as important, if not more, than learning how
to make money.
I go more in depth on keeping your liabilities low in my article.
I wanted to keep this video short so you won’t bore to death, if you’re interested, click
the thing at the top.
There’s also a great book called “What I Learned Losing a Million Dollars”, which
teaches you how to keep your money.
It’s harder than you think, trust me.
And finally, the BEST way to learn how to make lots of money is by learning from people
who HAVE lots of money.
And there is no one better than Sam Walton, the FOUNDER of Wal-Mart, the Richest Man ever
in America.
He wrote a book about his life before Walmart and the challenges he faced in his businesses.
You can check it out here, but I do recommend reading the book yourself, it’s not the
typical boring autobiography.
It’s actually one of the most interesting and valuable books I’ve ever read.
I hope you enjoyed this video, don’t forget to subscribe to see videos every Sunday.