My Journey To Billionaire Club

MyJourneyToBillionaireClub.
Com
What Rich Teach Their Kids About Money That Poor & Middle Class Dont?
Author: Asav Patel, Ahmedabad, India
WHAT RICH & ULTR-RICH (BILLIONAIRES) TEACH THEIR KIDS

ABOUT MONEY THAT POOR AND MIDDLE CLASS DONT?!!!!
Do You want to become Rich (Millionaire, Multi-Millionaire) or Ultra-Rich

(Billionaire) one day in your life? Then learn the following 6 Lessons of Rich
people. These are the lessons that rich people teach their kids but poor and
middle class dont.
Lesson: 1 Financial Statement
06
Lesson: 2 Asset Versus Liability
11
: 2.1 Asset Classes..
24
: 2.2 Business Mindset..
32
Lesson: 3 Active Versus Passive Income
40
Lesson: 4 Good Versus Bad Expenses & Debt.
51
Lesson: 5 Cashflow pattern of Rich, Middle class & Poor
58
If You Want to Discuss anything about this eBook or if you have any Query regarding any concept of this book
than you can directly contact Author on Investta.com The Investors & Entrepreneurs Forum. Or you can give
your feedbacks about the eBook directly to the Author (Asav Patel) at his Personal e-mail address
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Lesson: 6 The Power of Corporate Structure
67
A) Save Tax
.. 73
B) Asset Protection
.. 82
C) Create NEW Wealth in the Economy
.. 90
The History of Money, Gold Standard & Modern Banking 103

Asset is More Valuable than Money
111
Myth: 1 Go To School
116
..
121
Myth: 3 Work Hard to Earn More Money..
125
Myth: 4 Save Money
..
128
Myth: 5 My House is my Asset
132
Myth: 6 Get Out of Debt
140
Myth: 7 Live Below Your Means
.. 145
Myth: 8 Invest for the Long Term and Diversify
.. 149
Myth: 9 Retire With Pension Plans
153
Myth: 10 Capital Gains Versus Cashflow
.. 156
Myth: 2 Get a Job
Everybody wants to get rich one day in their life. But unfortunately, our
education system doesnt teach us anything about money.
And thats why when people leave their schools and colleges, they struggle
financially for the rest of their lives and live paycheck to paycheck. The
above are the 6 basic Lessons that Rich teach their kids but poor and middle
class dont. Rich have knowledge of these 6 lessons since their Childhood
and thats why they get rich when they grow older.
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If you want to get rich, millionaire or even billionaire than always remember
these 6 lessons in your life. And impart these 6 lessons in your children also.
So that they can also get rich.
Also remember that there is a basic difference between 3 mindsets.
01) Middle Class Mindset
02) Rich (Millionaires & Multi-millionaires) Mindset &
03) Ultra-Rich (Billionaires) Mindset
The basic difference between these 3 mindsets are,
01) Middle Class Work Hard for Money Middle Class people have a common mindset and that is, Finding out a safe
and secure job, work hard at that job place for years, live paycheck to
paycheck and retire at the age of 65 years when you become old.
This mindset they derive from their parents and grand parents. For them,
job security is the ultimate thing in their life. And they become fearful when
they hear about Job loss or changing the jobs.
These people have only one kind of skill and that is Earning money. These
people trade their time in exchange of money and receive a paycheck at the
end of each month in exchange of their time.
02) Rich Make their Money Work for them These are the millionaires and multi-millionaires. These people make their
money work for them hard rather than work hard in the economy. Making
your money work hard for you means Investments.
These people know that managing money (Investing) is as important skill as
earning money. Thus, these people are the Investors. These people invest
their money in vast variety of assets such as stocks, bonds, gold, real
estate, businesses, mutual funds, art, antiques, old wines, web properties,
domain names, paintings and many other assets.
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These people know that investment is a game of getting rich and financially
free and thats why they start investing in their very early lives. These
people know that the day you invest your money, it will start working hard
for you and make you rich and financially free over a period of time.
These group of people also teach their children the art of investing their
money since their childhood. During the same time middle class people
teach their children to work hard in the school to get good grades so that
they can get a good, high paying safe and secure job.
03) Ultra-Rich (Billionaires) Create New Money/Wealth (Legally) in
the Economy These are the Billionaires. And they have entirely different mindset than the
Rich and Middle class people. I mean these people literally create new
wealth in the economy.
I mean these are the people who neither work for money (Like Middle Class)
nor make their money work for them (Like Rich. Of course they invest their
money like rich but in different way). But these are the people who print
their own money in the economy and that is also legally.
So How These Ultra-Rich people create new wealth in the Economy?
How these Billionaires print their own money legally?
Well, the answer is By developing successful businesses and later on
taking those businesses to the public. And by selling the shares of their own
company/business to literally millions of people they become ultra-rich.
In short, they are the wealth creators.
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You will learn in each and every lesson that How the Middle Class, Rich and
Ultra-Rich use each and every Financial lesson in different way. The Financial
lessons are the same but the way of analyzing and thinking these lessons is
different. So Start reading these financial lessons one by one and
understand the 3 core mindsets or Middle class, Rich and Ultra-Rich
(Billionaires).
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Lesson: 1 Financial Statement Basics
You must have heard the word Financial Statement but probably know little
to nothing about it. The above is the simplified diagram of the financial
statement.
Once you leave your school and college, your Financial statement becomes
your Score card. This is because in the real life your financial statement
shows that how smart you are with your money.
Rich (And Ultra-Rich) people teach their children the basics of Financial
statement since their early childhood when they are in school. While Middle
class people never teach their children about the financial statement. And
this is the ONLY reason their children will also become middle class in the
future.
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And how can a middle class person teach their children the basics of financial
statement? This is because he/she himself/herself doesnt know anything
about the financial statement.
Let me explain you that What is Financial Statement and Why is it so
important to become rich in your life? Well, in simple words, Financial
Statement is a on paper record of your income, expenses, assets and
liabilities (In the next lessons you will learn in detail about these terms.).
A Financial Statement has two parts Income Statement and a Balance
Sheet as shown in the figure. Income statement has all the details of your
various kind of Income such as Salary, Interest Income, Dividend Income,
Rental Income, Business Income or any other kind of Income. It also has all
the details of your all kind of Expenses such as Tax, Food, Clothes,
Telephone Bill, Credit Card payment, EMIs and many others.
Balance Sheet has two Columns Asset column and a Liability Column. Both
of them have all the details about your Assets and liabilities.
The Middle class people think that there is only one financial statement and
that is their own. But well, this is a Myth. The Truth is that, any separate
financial entity has its own financial statement such as Real Estate,
Businesses.etc
The basic characteristic of rich people is that, they play the game of money
in multiple financial statements and most of the time they never own their
valuable assets in their own name means on their own financial statements.
Another important characteristic of Rich people is that, they always think in
the financial statements. So whenever they think about starting their new
business or investing their money they think that in which part of the
financial statement that business or investment will fit and how it will make
him more richer? While middle class people dont have any such kind of
mindset and thats why they never think in the financial statements.
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If you want to become Rich & Ultra-Rich (Billionaire) some day in your life
then always think in financial statements. Make the habit of thinking in the
financial statements. Rich teach their children to think in the financial
statements and thats why their children also grow rich in the future.
Middle class people never think in financial statements and this is the only
reason of their financial struggle. Middle class people always focus on
Income. They always focus on earning money. They dont have any element
or basic education or training like thinking in the financial statements and
thats why they also dont impart this knowledge to their children also and
thus their children also become middle class in the future.
But the kids of rich people always think in the financial statements. In fact,
anyone who is rich or going to be rich always think in the financial
statements.
Unfortunately, Financial Statement is something that is not taught in any
School. This is because the schools are designed to create employees and
self-employees who can run the businesses of rich people. If School will
teach everyone the basics of Financial statement than who will work like a
slave to run those businesses of the rich people? And thats why the word
Financial Statement and its importance is not taught in the school. And this
is the reason why the word Financial Statement is purposefully deleted
from the entire education system. This is because the rich people of the
starting of the industrial age (1800) knew that Financial Statement and its
knowledge is the gateway of becoming rich.
If you want to become Rich in your life than remember that, The Financial
Statement is the Gateway of becoming rich and Ultra-rich. Most of the
Financial advisors will tell you that which mutual funds and stocks you
should invest. But they will never tell you that You should first think in your
financial statement that weather the particular investment will fit in your
own financial statement or not?
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Not the every investment will make you rich although every investment has
potential to make you very rich. This is because you dont think in your
financial statements and simply buy the financial products without thinking
in your financial statements.
But the rich people are those who think in their financial statements before
making any investment in their life and thats why they never fail in any kind
of investments.
You will be surprised by knowing that, it were the rich people of the
Industrial Age (Early 1800) who have designed our entire education system.
And they have designed our education system in such a manner that it will
never teach you the basics and importance of the financial statement to
keep you middle class or poor and financially struggling for the rest of your
life. This is because they did not want that all the people in this world learn
the Financial Statement Basics The Gateway of becoming Rich and UltraRich.
Remember that, The person who has basic knowledge and applications
about the Financial Statement can never die poor.
Exercises
Ex: 1 See your own Financial Statement today. And if you are a school going
or college going student and dont have your own financial statement
(Ideally you should have) then see the Financial Statement of your Parents.
Ask your parents to show their Financial Statement to you.
Ex: 2 Now, go to the Internet and search for the Financial Statements of
Publically listed companies on the various stock Exchanges. Type the Search
keyword Financial Statement of XYZ Company in Google Search box and
download and analyze the Financial Statement of the various companies.
Ex: 3 Take a Paper and Pencil and draw the Simple line diagram of the
Financial statement as shown in the above figure. And remember this
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diagram very well. This is because the Financial Statement is the gateway of
becoming rich in your life.
Ex: 4 Teach your few friends, Children or parents the Financial Statement.
And Discuss the Financial Statement basics with other friends.
Ex: 5 Make a Habit to think in the Financial Statements. Means whenever
the topic of Investments, Money, Business, Job or Personal Finance is
discusses anywhere, think your own Financial Statement. Make this a Habit.
This is because Rich teach their kids to make a habit of thinking in the
financial statements.
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Lesson: 2 Assets Versus Liabilities

These are the another two terminologies which are not being taught in the
school. And this is the reason most of the people remain middle class or
poor and struggle financially for the entire life.
If you understand the meaning and the difference of the two words Assets
and Liabilities than you can really become rich and ultra-rich in your life.
Rich people teach their kids the meaning of these two words very clearly
since their childhood and thats why their children make excellent financial
decisions when they grow younger.
Diagram 1: Financial Statement Showing Assets and Liabilities.

Assets put Money into your pocket by generating cashflow while the
liability takes money away from your pocket by making expenses.
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Asset means anything which appreciates in its value (Capital Gains) and / or
Put money into your Bank Accounts (Cashflow) weather you work or nor.
Liability means anything which depreciates in its value and / or Takes
money out of your Bank Accounts.
These are the basic differences between the Assets and Liabilities. In other
words, Anything which puts money into your pocket is an Asset while
anything that takes money out of your pocket is a Liability.
Rich people always buy Assets while middle class people always buy
liabilities and after that struggle financially. Remember that, rich are those
who spend their most of the life accumulating Assets.
Examples of Assets are Stocks, Bonds, Gold, Real Estate, Mutual Funds,
Businesses, Art & Paintings, Rare Wined, Web Properties (Blogs, Websites &
Domain names), Intellectual properties, Copyrights, Patents .etc..
Examples of Liabilities are Debt, Car Loan, Credit card outstandings, EMIs,
Club memberships, Luxurious Cars, Watches, Clothes, Status Symbols,
Country Houses.etc
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Diagram 2: Rich Focus on the Asset Column While the Middle Class
focus on the Income (Hard Earned Money) and the Liability Column
Most of the middle class think that High Income is the indicator of financial
well beingness. Middle class think that people who earn high income are
rich. But this is a Myth.
The Truth is that, people who have more assets are rich. Income has nothing
to do anything with your wealthiness. The more assets you own, the more
rich you will become.
Rich people accumulate more and more assets in their life and thats why
they grow richer and richer. While Middle class people have a false belief
that the higher they will earn, the richer they will become.
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And thats why middle class work harder and harder at their job places to
earn more income. This is because they think that the higher income they
will have, the more richer they will become.
Diagram 3: Financial Statement of the Middle class Middle class

work hard for the Active income and focus on buying liabilities and
these liabilities make them expenses.
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Diagram 4: Financial Statement of the Rich. Rich focus on growing

their Asset column. They create, acquire and accumulate more and
more assets in their asset column and these assets generate passive
income for them.
But well, Rich know that Assets make anyone richer and richer. The main
limitation of Job Income is that, the day you will stop working, you will lose
that entire income. But the advantage of owning the asset is that, once you
acquire the asset after that weather you work or not, sleep or travel the
world, your asset will keep generating passive income for you for the rest of
your life and for your future generations even after you.
And thats why owning an Asset is the smart thing to do rather than working
hard at your job place to increase your income. Rich know this secret of
owning assets since generations and thats why they teach their children
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since their childhood the basic difference between assets and liabilities and
importance of owning the assets.
If you want to become rich in your life than always buy assets. Always focus
on growing the Asset column of your financial statement. This is because
rich always think of growing their Asset column of the financial statement.
While middle class always focus on their Income. Middle class always look
for the ways to increase their income. And thats why they work hard at their
job places, do over time at their job place or even do the multiple part time
jobs to increase their income.
But they dont know that the day they will stop working, their entire income
stream will suddenly disappear. Rich know this fact since their childhood and
thats why they focus their time, money and energy to build their Asset
column. And once they build sufficient asset column, after that weather they
work or not, the money from their asset (Passive income) will keep flowing
into their bank accounts for the rest of their lives and even after that.
Have you ever think that why rich people dont work for anyone else? Why
dont they like to do a job? Is this because they are rich? Nope. This is
because the rich people know that working for someone else (Job) means
trading your time in the exchange of the money. And the day you stop
trading your time in the exchange of the money, your income will also stop.
But well, if you have spent your time and energy to build assets in your life
than after growing your asset column sufficiently, even if you stop working
for the rest of your life, the income will still keep coming from your asset
columns.
And this is the prime reason why rich people start developing their own
Businesses, Investments and Assets since their very early life. This is
because they know that the time is very valuable asset and thats why they
use their time and energy to create assets (Businesses & Investments)
which can provide them unlimited cashflow weather they work, sleep or
travel the world in the future.
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Now, just think in your financial statement and the financial statement of the
company for which you are working as an employee. Well, when you do a
job means trade hours in the exchange of your time, you are developing the
asset of someone else (The owner of the company) in exchange of a
monthly paycheck.
In other words, when you work for someone else. You are growing the asset
column of that person by putting your time and energy in that business and
thus making the owner of that asset/business more richer.
So if you want to become rich or super rich in your life than start developing
your own assets in your life. Never work for someone else (job) and trade
your time in the exchange of the money.
So How Rich people Grow their Asset Column?
Keep in mind that, rich always think in the financial statements mainly in the
Asset column of their financial statement. They always focus and work hard
to grow the asset column of their financial statement. This is because they
know very well that the asset column of the financial statement is the only
thing which can make anyone Rich or Ultra-rich.
You can grow your asset column by 3 ways.
01) Acquiring Assets out of your Hard earned money
02) Convert Something into Asset
03) Creating new Assets in the world
The first way to grow the Asset column is you simply acquire assets out of
your income. Say for example, you buy stocks, bonds, gold, real estate,
mutual funds, web properties or any other asset out of your hard earned
money.
The second way to grow your asset column is, you convert something into
assets. Say for Example, if you have a bicycle then you can give it on rent.
Or if you have a good stamp collection then you can put your stamp
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collection in exhibition and generate cashflow from it and thus, you have
converted something into the asset.
Diagram: 5: Ultra-rich (Billionaires) Create New Assets in their Asset

Columns by developing a successful business and later on taking it
to the public.
The third way to grow your asset column is, you create new assets in your
asset column out of scratch. Super rich people think in this way and thats
why over the time they become billionaires. Creating asset means
developing businesses out of scratch or crating some kind of asset out of
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nothing such as writing a novel, writing a book, recording a music, making

an art or painting or making an online application or anything like that.
You will have to use your mind very well to create assets out of nothing in
your asset column. Say for example, take the example of Bill Gates. He
developed the operating system for computers - Windows (Previously DOS)
which he created out of nothing. Take the Example of Larry page who
developed Google, the world famous search engine. See the authors, singers
and artists around you. All of they create assets out of nothing and become
rich.
Thus, Rich teach their kids to focus mainly on the asset column of their
financial statement. In fact, all the rich people around the world are busy
with growing the asset column of their financial statement. They put their
time, money and energy to grow their asset column.
In contrast, Middle class people put their all time, money and energy to grow
their income. And thats why the more money they earn, the more hard
work they will have to do. But for rich, the more assets they will grow, the
more money their assets will generate and the less hard work they will have
to do.
So understand the basic difference between Assets and liabilities and spend
your time and energy behind growing your asset column.
Many Financial Advisors and Finance Gurus around the world advise you to
live below your means (It means Spend less than you Earn). Well, The
basic logic behind this personal finance advise is that, by reducing your
expenses, you increase your Cashflow (Income Expense). And this
increased cashflow is used to buy more Assets. But for the most of the
people this advise doesnt work. This is because they dont divert their
Cashflow to grow their Assets. They dont use their cashflow to create and
acquire more assets. And thats why not the all the people in this world who
live below their means cant become rich. Remember that, living below your
means will only make you rich if you are going to divert that cashflow to
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grow your Asset column by either creating new assets or acquiring assets
out of your Cashflow.
Billionaires are Ultra-Rich (Billionaires) because of their Assets and
not Because of their Income
Now, let us discuss something about the billionaires. There are almost 1100
Billionaires in the world according to Forbes. Do you know that why these
people are Billionaires? Well, most of the people in this world think that they
are billionaires because they have earned those billions of dollars. But well,
This is not the Truth. The Truth is that, these people are Billionaire because
of the Net worth of their Assets in their Asset columns. They are Billionaires
because of the Valuations of their Assets in their Asset column is above a
Billion dollar.
Say for Example, Bill Gates is a Billionaire and worlds richest person
because his own stake (Shares/Asset) in his own corporation Microsoft is
worth of Billions making him Forbes Billionaire. So the moral of the story is
that, you dont have to earn a billion dollars to become a billionaire. But you
need to acquire or create assets in your asset column which become worth
of billions in the future.
So focus on growing on your asset column rather than growing your Income
like Middle class.
Celebrities, Doctors & Lawyers are high Income professionals but
not all of them are Rich
Celebrities, Doctors and Lawyers are high income individuals. They earn lots
of money in their financial statements but still not the all of them are rich or
even billionaires. This is because they only earn high. The higher they earn
the higher they will pay in taxes and less they will accumulate. Most of the
high income professionals in this world have a false belief that they are Rich
because their income is high. And thats why they never focus on growing
their Asset column of the financial statement.
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But the truth is that, you can be rich only by acquiring more assets in your
asset column. You can not be rich by earning high income and without
accumulating assets. This is because the day you stop working behind your
hard earned income, it will suddenly stop while the income from your asset
(passive income) will keep flowing into your bank accounts weather you
work or not?
Diagram: 6: Biggest Offpaper Assets and Liabilities

Biggest Off-paper Assets and Liabilities
Some assets and liabilities are those which you can not write down or
include on your Financial statements. This is because they are intangible.
Here are they.
The Biggest Off-paper Assets are,
01) Time
02) Financial Knowledge
The Biggest Off-paper Liabilities are,
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01) Spouse
02) Friends
Rich accumulate more Assets and less liabilities. And this is the reason why
true rich people understand the value of their time. They have been taught
since their childhood from their parents that, The Los Money can be
recovered but the lost time can never be recovered. And thats why the rich
are time savvy. They spend their time in such a manner that it will produce
On-paper assets. No matter how smart you become financially but if you
become smart in your old age than there is no meaning. This is because you
have lost your time to become financially smart. And thats why time is the
biggest asset.
Another great Off-paper Asset is your Financial Knowledge means Knowledge
about money and how it works. Right now you are reading this article and
gaining the Financial Education. This will be your biggest off-paper asset
which will make you rich in the future. If you are young today but dont have
the Financial Education of money than your biggest asset Time is of no
value. This is because you dont know what to do with your time. You dont
have any idea that you need to focus your time to grow the asset column of
your financial statement.
Now, let us talk about the off-paper Liabilities. Always chose your spouse
and Friends very carefully. This is because spouse and friends which are not
carefully chosen can be your biggest liability. They will suck your Biggest
Asset Time and make you middle class or poor. You would have focus that
time to grow your Asset column otherwise.
Exercises
Ex: 1 Make the habit of thinking about the Asset column of your financial
statement. Before spending your time, energy and money always think first
that how will your this particular move will help to grow your asset column?
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Ex: 2 Take a paper and pencil and draw the Financial Statement line
diagram on it. And think that How you can create new assets in your asset
column? Think of starting your own business.
Ex: 3 Take a paper and pencil and make a list of Assets in one column and
liabilities in the other column. Now, think that which are the assets that you
understand more? Focus on those assets and acquire more and more of
those assets and grow your asset column like anything.
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Lesson: 2.1 Asset Classes

So now you understand the basic difference between Assets and Liabilities.
Assets put money into your pocket weather you work or not while liabilities
will take money out of your pocket. This is a simple definition of the asset.
You also know that, Rich focus their time and energy to create and acquire
assets. While middle class dont buy assets but they actually buy liabilities to
look cool and rich.
So if you want to become rich in your life than you will have to acquire more
assets in your life. You will have to work hard to grow the asset column of
your financial statement if you really want to become rich one day in your
life.
Diagram: 42 - Financial Statement Showing 4 Basic Asset Classes

In this article, we will discuss about various types of asset classes. Here are
the 4 basic types of asset classes in the world.
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01) Business
02) Real Estate
03) Paper Assets (Stocks, Bonds, Mutual Funds, Pension Plans..etc)
04) Precious Metals (Gold & Silver)
There are several types of assets in this world. But the above are the 4 basic
types of assets.
Other Assets - Intellectual properties (Books, Music, Movies, Novels, Patents, Inventions,
Copyrightsetc..)
- Web Properties (Domain names, Websites, Blogs, Forums..etc..)
- Art & paintings
- Rare Wine
- Vintage Cars
- Collectibles (Stamps, coins, old coke bottlesetc..)
Business First of all let me tell you that, Business is an Asset class. A Business is an
asset because it puts money into your pocket weather you work or not. And
thats why a Business is the asset. In fact, a business is the most valuable
asset class in this world. This is because the owners of the business can get
rich much faster than the owners of any other asset classes.
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Diagram: 43 - Middle Class work hard for Money (Active Income)

while Rich Work hard to create & Acquire new assets and grow the
asset column of their financial statement (Passive Income)
Developing a Business is all about creating new assets in the asset column of
your financial statement. Bill Gates (Microsoft), Larry Page (Google), Mark
Zuckerberg (Facebook), Dhirubhai Ambani (Reliance), Henry Ford (Ford
Motors), Ray Kroc (McDonalds), Michael Dell (Dell Computers), Steve Jobs
(Apple) have created their own Assets Their own businesses which are
multi-billion dollar empires today making them billionaires.
Business (& Real Estate) is the preferred asset class of the rich people. In
fact, 99.99% of worlds rich people own at least one business in the asset
column and thats why they are rich and ultra-rich. So if you want to become
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very rich in your life than develop at least one successful business in your
life.
Real Estate This is the second asset class which is preferred by Rich people. This is
because the rich can acquire this asset class by using good debt (Mortgage
Loan). Say for example, if the real estate property is worth of $ 5 Million
than a rich can acquire it just by putting $ 1 Million down (20%). This is the
main advantage of real estate investments.
You can use debt to acquire this asset and ultimately become more richer
than ever.
Paper Assets These are basically the assets of the Middle class and Upper middle class.
This is because these are the assets for capital gains only. The Examples are
Stocks, Bonds, paper Gold and Mutual Funds or any other kind of paper
assets.
Rich also invest in these assets but not from their hard earned money but
from
the passive income
generated by
their other cashflow
assets
(Businesses & Real Estate). Thus, for Rich paper assets are the last asset
classes to acquire while for the middle class this is the first asset class to
acquire.
Today all the employees and self-employees around the world invest in this
asset class mainly for the capital gains. But unfortunately, investing for the
capital gains is the risky form of investing. While rich invest for both
cashflow and capital gains.
Precious Metals (Gold & Silver) After 1971, the US Government has removed the gold standard and the US
Dollar became free float currency means the US Government can print as
much money as it want according to the need of the economy after 1971.
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And subsequently all the countries of the world have removed the gold
standard.
Thus, the more money the banks and governments from all around the
world will print, the price of the precious metals will go up more.
Well, of course Rich Invest in Gold. But the gold is not their primary asset
class. This is because it is the Capital gains asset class. It doesnt provide
you any cashflow.
The problem with middle class people is that they invest in gold as a primary
asset class and thats why they will have to depend on only one kind of profit
and that is capital gain. This is really a risky Investment strategy.
Diagram: 44 - Difference between Middle class and Rich Investing

(Middle Class Invest for the Capital Gains while Rich Invest for
Cashflow & Capital Gains Both.)
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The Difference between Rich & Middle class investing The rich and middle class both invest in all of the above asset classes but in
the different way. After all, all of the above are the assets and as we have
learned in the previous lesson that to become rich, all you need to do is to
acquire more assets. So the more assets you will acquire, the more rich you
will become.
Thus, all of the above are after all the assets and can make you rich and
richer. But the only problem with the middle class is that, they buy
mainly Capital gain assets (Paper Assets & Precious Metals) from
their hard earned money which is a risky thing. This is because the
middle class have been taught in the school that Business is risky.
While Rich people mainly buy (or create) Cashflow (+ Capital Gain)
Assets (Businesses & Real Estate). And from the income generated
by their cashflow assets, they buy the capital gain assets like Gold
and Paper Assets (Stocks, Bonds & Mutual Funds).
This is the single difference that can make you rich or middle class in the
long run. Many middle class accumulate lots of assets in their Financial
statements but most of them are paper assets & Gold the capital gain
assets only. And thats why they will have to wait for years until the price of
the asset goes up.
While Rich primarily buy the cashflow (+ Capital gains) assets so the day
they acquire these assets, their income and cashflow also improves
immediately. Thus, they can enjoy their life very well as well as acquire
more assets from their increased income very easily.
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Online Assets - Information Age Assets After the birth of the Internet in 1990, the entirely new asset class has been
created in world known as Web Assets or Web Properties.
The Examples are Websites, Blogs, Forums & Domain Names.
These web properties tend to appreciate so much fast that even high school
going kids started becoming millionaires before leaving their high schools. In
fact, today many self-made billionaires are in their twenties and thirties only
because of the web properties.
The founders of Facebook, Amazon, Google & eBay are the billionaires
today. The reason why web properties appreciate so much faster is because
the entire world is connected to the internet today which makes exponential
growth of the web properties in its valuations as well as the cashflow.
If you want to become very rich in your young age than try this asset class.
This is because it is the only fastest appreciating asset class in the world
which can make even a school going kid a millionaire or multi-millionaire
before leaving his high school.
Summary:
If you want to become rich than acquire any kind of assets. Keep
accumulating more and more assets out of your money. If you want to
become rich than the only thing you need to focus is on the asset
column of your financial statement and nothing else.
However, there is a huge difference between the middle class and rich
investing. Middle class invest primarily in the paper assets and gold
while the rich invest primarily in the businesses and real estate and
after that acquire other capital gain assets like paper assets and
gold.
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So if you want to become rich than it is advisable to start a Business or real

estate investing first. This is because these are the cashflow assets which
can acquire other assets afterwards without much efforts.
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Lesson: 2.2 Business Mindset

In lesson 2.1, We have learned that the Business is the preferred asset class
of rich people. And the rich people teach their kids since their childhood that
they should own a business first and later on acquire other asset classes
such as paper assets and gold.
We also learned in the previous lesson that, middle class mainly focus on
acquiring paper assets and gold first while rich focus mainly on developing
their own business first and after that they acquire and accumulate other
asset classes.
And this is the reason why people should have at least one privately owned
or a business on which you have at least 10% of the management control.
Thus, starting your own business should be the first thing you should do to
grow the asset column of your financial statement. And thats why the
financial advise to get rich is Start your own Business as early as possible.
Now, the only problem with starting and running a successful business is
that,most of the people dont have any mindset to start and run a business.
Why Middle class Dont have mindset to Own their own Business?
Because of the Education System. The entire Education system is designed
in such a manner that the schools and colleges will only teach and motivate
you to become employees and self-employees.
The reason why most of the people afraid of starting their own business
even though they know that it is very important asset class to own to
become rich is Because Schools have trained them to become employees
and Self-employees.
When people leave the school, they leave their schools physically but they
dont know that their school has imparted a mindset of becoming an
employee or self-employee. Over the time, the school has developed various
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reflexes in your brain that you will feel fear when you think of starting and
owning your own business.
Diagram: 45 - School imparts different sets of keywords (Middle

class) in your mind while to become a rich you will need different
sets of keywords The keywords of Rich.
So Which are those Reflexes that prevent you to start your own
Business?
01) Well, the first Reflex the school develops in you since childhood is,
Exam fear. In the exams, if you ask the answer of some question to your
friend or colleague, you will be punished. This kind of system is designed
because the school wants you to become employee or a self-employee
(Doctor, lawyer) in the future.
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And thats why you will have to do all of your work by yourself. While in the
real life, Businesses run with the team work. So by taking exams, Schools
are developing a false mindset and a reflex to not to do a team work.
This is because the schools know that if you will do a team work, you will
definitely become successful. And this is what a Successful Business
requires. Any successful Business in this world is the end product of a great
tea work. Before
taking any key decision, the
board of
directors,
management team and key officials of any business discuss that issue and
after working on that issue as a team, they collectively take a decision.
And this type of mindset is EXTREMELY IMPORTANT to develop a
successful business which can work even without your presence generations
to generations.
But Schools have been designed in such a manner that, such kind of mindset
that is extremely important to develop a successful business doesnt develop
in your mind. This is because the basic function of a school is to develop a
mindset in your mind of that of Employees & Self-Employees who have to
work hard alone by themselves for the business owners. And thats why you
are not allowed to do a team work in your exams. And if you try to do it, you
will be punished in your school.
Now, when you leave your school, this mindset of working alone and
doing everything by yourself makes you a perfect employee or a
self-employee. And thats why after leaving your schools and
colleges, you wander here and there to find a job. This is because
now you fear of doing a team work. This is because the school has
punished you or prevent you to do a team work in your childhood.
Now, take the examples of various Billionaires who are high school and
college drop outs. Say for Example, Bill Gates, Dhirubhai Ambani, Mark
Zuckerberg, Subhash Chandra, Steve Jobs, Henry Ford and many others.
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These people have left their schools and colleges before completing their
education and thats why the school system failed to develop a mindset of
working alone in these people. And thats why these people did the team
work and made their fortunes. Today they are billionaires.
So if you want to start your own business than first of all think of doing a
team work. Try to understand that the school system has imparted this
mindset of working alone while you need to do a team work to become a
successful business owner.
And this is the reason why many small business owners dont make any
fortunes from their businesses. This is because they do everything by their
own in their businesses.
02) Second reflex the school develops in you is, fear of thinking about
money. Our School system teaches us the following words repeatedly.
- Go to School
- Work Hard
- Get Good Grades
- Get a Job The worst keyword that can prevent you being rich. The
Schools give you only one option to make money and that is job. And this
simple keyword is so much smartly incorporated into your brain by education
system that you can not think anything other than getting a job once you
leave your school. So first of all delete this keyword from your mind.
- Job Security
- Become a Doctor
- Job Safety
- Do it yourself
- Dont ask for anyones help
- Be Self Dependent
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- Dont think about money during your school timeetc..

Thus, the above keywords are embossed in our minds when we leave a
school. Unfortunately, the schools dont teach us the following words that
rich teach their kids.
- Financial Statements
- Assets
- Liabilities
- Good & Bad Debt
- Cashflow
- Active & Passive Income
- Investments
- Business
- Create Jobs
- Real Estate Investingetc
The above are the keywords that should be embossed in your mind if you
want to become rich and ultra-rich. But the above words are smartly
removed from the entire education system. So that you dont think and
understand the game of money.
Thus, when you leave your school, you leave your school with the first set of
the keywords which are taught to you in school. And thats why even after
becoming a high skilled doctor, you prefer to work as an employee at
government hospital or some privately owned multi-speciality hospital.
This is because in your sub conscious mind, the first set of keywords are
embossed by your schools. And over the time, these keywords have become
your subconscious (Spinal) reflexes.
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While to grow rich, you will need to emboss the second set (Shown above)
of keywords in your mind. These are the keywords by which you can
understand money and the game of money. And thats why rich emboss the
above keywords in the mind of their kids since their childhood.
It is the School which emboss the false keywords in your mind since your
childhood and thats why when they enter into the real life, they fear of
starting their own business and cant understand the game of money. This is
because the only keywords which are embossed in their mind are get a job,
job security, go to school, work hard, do it yourselfetc
So now, if you want to start your own business than first of all remove the
above two reflexes from your mind which the school system has developed
in your mind. And after that incorporate a new mindset by learning and
understanding the new sets of keywords given in this lessons series.
Creating Your own Business is the Ultimate Way to Become Rich So now, you know that rich are rich because of their asset column. Rich are
rich because they keep acquiring more and more assets out of their money.
Rich accumulate all types of assets such as Businesses, Real Estate, Gold,
Paper Assets, Web assets and many other types of assets.
But the Business is the only Asset which is the most valuable asset that rich
people have. Creating a new business out of scratch is all about creating
new asset in your asset column. And the Business will generate passive
income for you from which you can acquire other Cashflow or Capital gain
assets to grow richer.
What common mistake the middle class people do is, they start acquiring
capital gain assets first like gold and paper assets (Stocks & Mutual Funds)
and thats why they cant grow rich than certain limit.
While rich teach their kids to develop a Business first and later on from the
passive income of their businesses, acquire other assets. Thus, start
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developing your own business since your very young age and become rich
and financially free.
Middle Class people buy capital gain assets like gold and paper assets from
their hard earned active income. While rich people buy these assets from the
passive income generated by their ultimate Asset Business. And this is the
core difference between the rich and middle class.
Diagram: 46 - Middle Class Work hard to earn money and Buy Capital
Gain Assets While Rich Work hard to create their own Asset
(Business) First which hires other Assets.
First of all you should develop your own Business first and later on
you should buy other assets to become rich while the middle class
do exactly reverse means they first of all buy capital gain assets like
gold and paper assets hoping that one day they will become rich and
later on start their own business!!!
Exercises:
- Entirely remove the first set of keywords from your mind. Never think
about those keywords in your mind.
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- Start learning and thinking the second set of keywords in your mind. This
is because these are the keywords which are required to win the game of
money. You can not win a game of money by using the first set of keywords.
- Develop a habit of doing everything in a team work. Start developing a
great team for your business.
- Develop a habit of thinking in the financial statements.
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Lesson: 3 Active Versus Passive Income

The reason why most of the people in this world struggle financially and live
paycheck to paycheck for their entire life is, because they dont know the
basic difference between the Active versus Passive income.
While rich people know this difference since their early years of life and not
only this but they teach their children this basic difference since their early
childhood and thats why their children also grow rich.
Diagram: 7 Active Versus Passive Income

Active income means the income to earn which you have to work hard and
the day you stop working for your active income, your this income stream
will be suddenly disappear. Say for Example your job income or the income
from your profession such as doctors, lawyers, accountantsetc
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The only problem with the active income is that, to maintain this income
stream, you will have to keep working hard for your entire life and once you
stop working behind your active income, it will be lost.
Passive Income means the income to earn which you will have to work
hard at once only. And once you do that hard work, your job is over. After
that weather you work or not, this income will keep flowing into your bank
accounts for the rest of your life and even after that.
In other words, Income generated by Assets is known as Passive
Income. Here you will have to work hard at once only to acquire or create
that asset and once you have that asset in the asset column of your financial
statement, your job is over. After that weather you work or not, the income
will keep flowing into your bank accounts forever.
The Examples of Passive income are Interest Income, Dividend Income,
Capital Gains, Business Income, Rental Income, Website/blog Income,
Online Applications Income, Royalties of Books, Music & Moviesetc..
Middle class people dont know the concept of Financial Statement, Assets
versus liabilities and the difference between active and passive income. And
thats why they teach their children to work hard in their schools to get good
grades and later on work hard at their job places to earn high income.
While Rich people teach their kids the difference between the active and
passive income. And teach their children to work hard for the passive
income. They teach their children to work hard to grow their Asset column
so that someday in life if they plan to not to work then also the passive
income from their assets keep flowing into their pockets.
And how can the middle class know the difference between active and
passive income? This is because our education system only teach us how to
earn money but it never teaches us how to make our money work for us.
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Diagram: 8 Middle Class Work Hard for Active Income
Diagram: 9 Rich Work Hard for Passive Income
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Both the Rich and middle class people teach their children to work hard in
their life. But the middle class teach their children to work hard for the
active income (Job, Profession) while the Rich teach their children to work
hard for growing the asset column of their financial statement and generate
passive income.
The main problem with working hard for the active income is that, here you
are trading your time in exchange of money. And the time in anyones life is
limited. So the day you will become old or disabled, your this income stream
will disappear from your financial statement.
But if you have worked hard and spend your time and energy to build your
own asset column than even if someday you stop working, your assets will
still generate money for you for the rest of your life and for your future
generations.
Say for Example Business. A Business is an asset. And you will have to
work hard for once only to develop a successful business. After that you can
higher business managers to run and grow your business even without your
presence.
Another Example is Royalties. A Writer/Author works hard at once only to
create a great novel or a book. After that weather he works or not, the
royalty income will keep flowing into his bank accounts for the rest of his life
and even after that. This is because people will never stop consuming his
novel/book and he will never stop making money.
So rich or Middle class, all have to work hard. But the basic difference is that
Rich work hard for growing their asset column and generating passive
income while the middle class work hard to increase their active income. And
thats why in the long run, Rich beat the game of money.
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Diagram: 10 Ultra-Rich (Billionaires) Work Hard to create Assets

Now, let us talk about Ultra-rich (Billionaires) people. Ultra-rich people
develop a successful business out of scratch since their early life (20s) and
later on take that business to the public and grow it even larger.
Remember that, Rich people always think in the financial statements and
before working hard, they make sure that they are working hard to grow
their asset column and generate the passive income.
Also remember that the Active Income is not the indicator of how rich you
are. But it is the Asset column of your financial statement and the passive
income which are the indicators of how rich you are. Say for Example, a
Doctor earning lots of money from his medical practice is not necessarily
rich. He may be rich. But for that we will have to see his financial statement
and its asset column and the passive income.
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Most of the time, middle class people consider those people rich who are
earning lots of income (Active income) from their jobs and spend lots of
money and buy expensive cars, mobiles, watches and clothes. But well, this
is the middle class thinking.
While Rich never predict anyones financial status from his cars, mobiles,
watches and clothes. But from his Financial Statement. It is the Asset
column and the passive income of anyones financial statement which makes
someone rich.
So never judge anyones financial status from his Active income. But always
think and analyze that how many assets that particular person really owns
and how much passive income his assets generate.
Diagram: 11 Middle Class Afford Liabilities from Active Income
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Diagram: 12 Rich Afford Liabilities from Passive Income

Rich afford Liabilities and Luxurious Items from their Passive
Income While Middle class afford them from their Active Income
This is another great difference between rich and middle class. Rich, Middle
class or poor, every human being on this earth wants to buy luxurious cars,
expensive clothes, watches & mobile and want to do expensive shopping and
travel the world. After all we are human beings and we love to buy luxurious
items.
But Rich people first of all grow their asset column to such a level that from
that level their asset column throws sufficient passive income that they can
afford all of liabilities and luxurious items from their passive income while
middle class dont have such kind of mindset or understanding of difference
between Active and Passive income and thats why they try to afford
everything from their Active income which is really a dangerous thing.
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The Smart thing is to grow your Asset column and generate passive income
first and after that afford all of those liabilities rather than affording liabilities
and luxurious status toys from your hard earned active income.
Hyper consumption Treadmill
Diagram: 13 Middle Class afford everything from Hard Earned money

while Rich have assets to afford everything
Ultra-Rich, Rich or Middle class All of us are the Consumers. We love to
consume things. We love to do shopping, dating, travel the world, buy
luxurious cars, watches, clothes and status symbols.
This is because as a human being, we love to buy all the luxurious items in
our lives and love to enjoy our lives. In fact, Middle Class and Rich people
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spend the same amount of money behind their consumer lifestyle. But there
is a vast difference between the way they earn.
Middle class have Active Income while Rich have Passive Income. Thus,
Middle class people afford everything from their hard earned active income
while on the other hand rich afford everything from their passive income.
Both Rich and Middle class work very hard and spend lots of money behind
their lifestyle. But the basic difference between the hard work of rich and
everyone else is that, Rich work hard to grow their asset column of their
financial statement first and from the passive income of their asset column
they afford all of the luxuries of their lives.
While the Middle class work hard to increase their income first and afford
everything from their active income. And this is the reason, the more they
spend money, the more they work hard at their workplace to earn more
active income and this goes on like treadmill, the treadmill of the
hyperconsumption.
One day comes when they have acquired so many liabilities from their active
income that they cant afford all of these liabilities and thus they go to some
personal finance advisor or read some book on personal finance.
Now, the problem of taking advise from a personal finance book or
the advisor that, the book author or the advisor himself a middle
class person who will give the middle class advises to the middle
class person like to spend less than he earns, live below your means
and buy only the things that you really need and not you really want.
Unfortunately, these are the moral killing advises. And these advises are for
people who want to remain middle class only. Live below your means is a
great financial advise for you if you want to stay middle class for the rest of
your life. Understanding the difference between the need and want is really
beneficial if you want to kill your feelings of buying luxurious and status
items in your life.
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But well, if you want to become rich and want to enjoy all the luxuries of
your life than these are not the financial advises for you. This is because
these financial advises will kill your moral, feelings and make you feel
depressed.
So What is the Financial Advise for people who want to be Rich as
well as enjoy all the luxuries of their lives?
Well, The Advise is - WORK HARD TO GROW YOUR ASSET COLUMN
FIRST AND GENERATE PASSIVE INCOME FROM YOUR ASSET COLUMN
AND AFTER THAT AFFORD ALL THE LUXURIES of THE LIFE FROM THE
PASSIVE INCOME OF YOUR ASSET COLUMN.
Affording the Luxurious Lifestyle with your Active Hard earned
Income is a Fools Plan.
So if you want to buy a luxurious car like Mercedes or BMW in your life or
want to afford luxuries in your life then grow your asset column first. First of
all work hard to create and acquire assets in your asset column of your
financial statement and after that afford all of these luxuries in your life.
Say for Example, when Rich want to buy a luxuries car, he first of all buy a
rental property and from the rental income of his rental property he will pay
his car loan payments. Or he will develop a Business first and from the
passive income of his business he will afford the car loan payments of his
luxurious car as well as other luxuries. While Middle class also buy a
luxurious cars but they afford all the car loan payments from their active
income and thats why to make the car loan payments, they will have to
work harder and harder while the rich will still keep making the same
amount of money weather they work or not. This is because they work hard
to create and acquire more assets and these assets generate income for
them.
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Exercises:
Ex: 1 Take a piece of paper and pencil and make a list of all the possible
types of Active income (means the income that will stop when you will stop
working for it) and Passive income (means the income that wont stop
flowing into your bank accounts even if you stop working for it.)
Ex: 2 Teach your friends, kids, relatives, parents the difference between
Active and Passive Income. And tell them to work hard for the passive
income and not the active income.
Ex: 3 Find out your own Passive Income. Let me give you the Example. Say
for Example Business. A Business Income is your passive income. So take
a break and think that which business you want to develop?
Ex: 4 Draw a Line diagram of Financial Statement on paper and make a list
of assets in the asset column from which you want to generate passive
income.
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Lesson: 4 Good Versus Bad Expenses and Debt

So by far you know that your financial statement has two parts Income
Statement and Balance Sheet. Income is of two types Active and Passive.
While Balance sheet has two columns Asset and Liability. You now
understand the basic meanings of the terms Financial Statement, Asset,
Liability, Active and Passive Income.
Now, let us discuss about the Expenses and Debt. There are basically two
types of Expenses and Debt Good and Bad.
Diagram: 14 Good Versus Bad Expense / Debt

A Good Expense or Debt is one which is Asset producing. Any Asset
producing debt or expense is known as Good Debt/Expense.
A Bad Expense or Debt is one which is Liability producing. Any Liability
producing debt or expense is known as Bad Debt/Expense.
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Just see the above diagrams. According to the diagrams, any expense/debt
which produce assets at the end is known as a good expense/debt. While
any expense/debt which produce liabilities at the end is known as bad
expense/debt.
Rich people always do the good expenses while the middle class people
always do the bad expenses. Rich understand that, the Asset column of the
financial statement is very important to generate passive income and getting
rich. And thats why they always do the expenses to acquire more and more
assets out of their money.
Middle class people only love to look cool and rich. And thats why they do
the expenses and ultimately acquire liabilities which depreciate in its value
over the period of time and making them poorer.
If you want to become rich one day in your life than always do asset
producing expenses (Good expenses) and never do Liability producing
expenses (Bad expenses).
The Examples of Asset producing expenses are, Educational fees,
college fees, tuition fees, Stocks, Bonds, Gold, Businesses, Real Estate,
Mutual Funds, Web properties, Intellectual propertiesetc..
The Examples of Liability producing expenses are Luxurious Cars,
Mobiles, Clothes, Travelling, Club memberships, Shopping, Country Clubs,
Luxurious Watches, Credit card debt, car loans, personal loans, Shopping
EMIsetc..
Rich and middle class both do lots of expenses. But one type of expense
(Good / Asset producing) makes you rich while the other type of expense
(Bad / Liability producing) makes you middle class or even poor.
Rich people teach their children the basic differences between Good and Bad
expenses since their childhood and thats why the rich think in financial
statements before doing any kind of expense. Before doing any kind of
expense, rich think in their own financial statement that weather this
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expense will produce asset or liability in the future. And if that expense is
going to produce liability in the future then the rich will simply avoid that
expense.
This is the ultimate secret of the rich.
Diagram: 15 Good Debt
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Diagram: 16 Bad Debt

Another great secret of the rich people is that, they understand the basic
difference between good and bad debt. Middle class people use debt (Loans)
to buy new cars, shopping, personal loans, club memberships and world
tours. They believe in buy today and pay tomorrow type of mentality. And
this is a bad debt. Once you buy a luxurious car by taking a car loan, within
4 years it will lose its 60% of value. And rich dont like depreciating items
(Liabilities).
Rich people use debt (Loans) to buy Assets from it to add them into their
asset column to grow richer such as Educational loans, Business loans,
Loans to start or expand a business, loans to do the investments or any
other kind of debt/loan to acquire assets out of it. This is because rich know
that assets appreciate in its price over the period of time and also produce
passive income and thus make them richer.
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Once the debt will be completely payed, the middle class will have liability in
their financial statement which will rapidly depreciate in its value and also
make expenses from their pockets. While the rich will have asset in the
asset column of their financial statement which will appreciate in its value
and also generate passive income and make them more richer than ever.
All the middle class people afraid to take Good debt. You just observe any
middle class. Any middle class will really enjoy and love to take bad debt.
But he will afraid of taking good debt. Say for Example, when it comes to
buy a new car, the middle class will readily take a huge car loan to buy a
new car but the same middle class will be afraid of taking a loan to start his
own business or acquire or develop any other kind of asset.
And for this, they will proudly give excuse that, this is because the business
is risky. But how can a middle class take a good asset producing debt? This
is because our education system has never taught us the difference between
assets & Liabilities, Active & Passive Income and the Good versus Bad Debt.
And this is the reason, when most of the people enter into the real life, they
afraid of taking good debt which produce assets at the end.
But to become rich, the middle class need to do exactly reverse means
taking more and more asset producing debts and less and less liability
producing debts.
What happens when the middle class find themselves in a deep debt that
they cant repay? Well, they go to some financial planner, advisor, debt
counselor or some blog on the internet and these financial planners will tell
them that debt is a bad thing and you should get out of it as early as
possible and never take it again in your life. Well, getting out of bad debt is
really a good financial advise. But never taking a debt is not a sound
financial advise. The financial planners and advisors wont tell you that never
take a bad debt. And this is the reason after going into a deep bad debt, all
the middle class people become so much scared of taking a debt that they
teach their children not to take any kind of debt in their lives.
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And thats why one more generation of middle class generates in the world.
A generation which afraid to take any kind of debt and think that not taking
a debt is a wise financial decision.
While rich people teach their kids since childhood that if they want to
become richer and richer like their parents than they will always have to buy
assets out of their money (Good Expense/Debt) and never buy liabilities out
of their money (Bad Expense/Debt).
Rich people teach their kids that there is not any problem in taking a debt if
that debt ultimately produces asset. In other words, kids of rich people know
since childhood that there is not any problem in taking a debt if you are
going to buy assets out of that debt.
This is the advantage of thinking in the financial statements. Middle class
dont have any element or training to think in the financial statements and
thats why before taking a car loan or buying anything they never think that
weather the thing they are going to buy will fit into their Asset Column or
the Liability Column and what will happen if the asset column or liability
column of their financial statement will grow?
In other words, if you want to become rich and super-rich than always focus
on the Asset column of your financial statement. Always spend your money
to buy more and more assets or grow the existing assets in your asset
column (like business). If you never think in financial statements and never
focus on growing the asset column of your financial statement than you can
never be Rich!!!
Exercises:
Ex: 1 Take a paper and Pencil and draw the line diagram of a Financial
Statement and write down the various assets you own and the various
liabilities you own in your financial statement. And after that think of
increasing assets and reducing liabilities.
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Ex: 2 On a piece of paper, write down all of your monthly expenses and
after that differentiate between Good and Bad Expenses. If you really want
to become rich than eliminate all of your bad expenses and increase the
good expenses. Of course, Basic expenses like food, clothing, Internet
connection and housing rental are not counted towards the bad expenses.
Ex: 3 Teach your friends, kids, parents and relatives the difference between
the Good and Bad Expenses. Draw the line diagram of Financial Statement
and teach your friends, kids and parents the difference between Good and
Bad Expenses and Debt.
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Lesson: 5 Cashflow Pattern of Rich, Middle Class and Poor

The Cashflow pattern on your financial statement will determine that
weather you will become rich, middle class or poor in the future. And
suppose if you are a born rich or inherited a fortune by any means such as
lottery, parents or spouse than also your cashflow pattern will determine
that weather you will grow richer, middle class or even poor.
Cashflow means the flow of money in your financial statement. Cashflow
literally means the circulation of money in your financial statement. It means
that in which direction the money is flowing onto your financial statement.
Now, the above is the laymans simple definition of the Cashflow. In
sophisticated language, Cashflow means Income Expense. So suppose if
you earn $ 3000 every month and your monthly Expense is $ 1000 than
your cashflow is $ 1000 every month.
Diagram: 17 Cashflow Pattern of Asset
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Diagram: 18 Cashflow Pattern of Liability

Now, how you divert this cashflow will determine that weather you will
become rich, middle class or poor. This is because rich, middle class and
poor all have different kind of cashflow patterns on their financial
statements.
Thus, from the Cashflow pattern of anyones (Individual or Business)
Financial Statement, you can predict the financial future of that person. Well,
yes. If you can understand the cashflow pattern than you can become a
Financial Astrologer!!!!
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Diagram: 19 Cashflow Pattern of Poor

Cashflow Pattern of Poor
See the above diagram. The above line diagram is a Cashflow pattern of the
poor person. See in the Financial statement of the poor person. See that
everything the poor person earns will be spent for basic lifestyle expenses.
Thus, a poor person works hard and bring money to home every month via
salary or paycheck and at the end of the month, he spends all of his money
and thus become poor. Nothing goes towards Asset column which is the
ultimate key to become Rich.
Suppose if today you are rich because of inheritance or by any other means
(Such as Lottery) and if your Cashflow pattern is like this than you are in
danger. You are in danger of becoming poor in the future. And you urgently
need to modify your Cashflow pattern.
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Diagram: 20 Cashflow Pattern of Middle Class

Cashflow Pattern of Middle Class
See the Above diagram. The above diagram is a Cashflow pattern of typical
middle class people. It is almost same like poor people. The only main
difference is that, the middle class first of all buy liabilities (Expensive Cars,
Expensive Travels, mobiles, luxurious items, credit cards, bad debt, personal
loans, club memberships, country club memberships, exclusive clubsetc..)
from their hard earned money (Active Income) and after that these liabilities
make recurrent expenses and takes money out of their financial statements
from the expense column.
The typical middle class mentality is that, the more they earn the more
liabilities they acquire and these liabilities do tremendous expenses over the
time and thats why to afford these liabilities they need to work harder and
harder at their workplace to earn more and more money.
The main difference between the rich and middle class is that, Rich afford
every liability from their Passive Income while the Middle class afford their
all liabilities from their Active Income. And thats why weather rich work or
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not, they can afford liabilities for the rest of their lives while middle class
have to work hard until they want to afford those liabilities.
Unfortunately, What most of the financial advisors and Finance gurus advise
people is that - Live Below your means. Well, this is really a cool
theoretical advise but practically it is impossible to follow. After all, we are
human beings and we love to drive expensive cars, buy expensive mobiles,
travel the world and date with beautiful women in expensive restaurants.
Thus, Rich or Middle class all of us love to buy new cars, clothes, expensive
watches, dating and travel the world. The only difference is the Cashflow
pattern and the type of Income. The cashflow pattern of middle class person
is in such a manner that he afford all of these luxuries and liabilities from his
hard earned active income while a rich person afford everything from his
passive income. Because his cashflow pattern is designed in such a manner.
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Diagram: 21 Cashflow Pattern of Rich

Cashflow Pattern of Rich
This is the Cashflow pattern of Rich. See the above diagram. Rich first of all
acquire assets out of his money and grow his asset column. This is because
rich knows the secret that Asset column is the only thing in the life which
can make anyone rich. And thats why rather than focusing on the Income
like Middle class, Rich buy assets out of his hard earned money.
And because of this, over the time their Assets grow and start throwing
passive income into their financial statements and from this passive income,
the rich again buy more and more assets and grow richer and richer.
One day comes when the passive income from the Asset Column of the rich
crosses the monthly expense of the rich and from that day, he stops working
hard for the money to earn active income. This is the day of Financial
Freedom. Because from this day, weather he works or not, the money will
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still flow into his financial statements from his Asset column in the form of
passive income.
Rich and Middle class both love to buy luxurious cars, expensive watches,
clothes, foods, dating and status toys. But well, the basic difference between
the two is the Cashflow pattern. Middle class afford every luxury from his
Active Income while Rich afford every luxury from his Passive Income.
This Cashflow pattern difference of Rich and Middle class makes all the
differences in the future. Over the time, Middle class cant afford all the
luxurious for his entire life because one day comes when he wont work as
hard as he used to work when he was young. And from that day, he will
suddenly lose his active income. But well, Rich has worked hard to grow the
asset column of his financial statement and generate the passive income.
And thats why even the rich will stop working someday, he will still continue
affording all of the luxuries and status toys for the rest of his life and even
after his death (Means his future generations will also afford the same
luxurious items).
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Diagram: 22 Cashflow Pattern of Ultra-Rich

Cashflow Pattern of Ultra-Rich (Billionaires)
The Cashflow Pattern of Ultra-rich is also obviously the Asset Column
focused just like rich. But there is one major difference that makes them
Ultra-rich.
See the above diagram. Well, Rich people acquire assets (Stocks, Bonds,
Gold, Real Estate, Businesses, Mutual Funds, Art, Web propertiesetc..)
from their Income while Ultra-Rich people simply create Assets out of
nothing in their Asset columns and these assets start generating passive
income for them.
Say For Example Bill Gates, The founder of Microsoft and world class
Operating system Windows. Bill Gates has created Asset (Microsoft &
Windows) in his financial statement and his this single asset has grown to
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such a level that he is today worlds most richest person since last more
than 15 years.
Larry Page had created the Asset in his Asset column known as Google. Mark
Zuckerberg also had created the Asset in his Asset column known as
Facebook and Dhirubhai Ambani also had created an Asset in the Asset
Column of his Financial Statement known as Reliance Industries.
The rest Cashflow pattern is the same as that of rich. Means Ultra-rich
create Assets in their Financial Statements> Generate Passive
Income > This Passive Income acquire other Assets (Stocks,
Bonds, Gold, Other Businesses, Art, etc..)
Rich acquire assets out of their money while the ultra-rich create assets
which generate huge passive income and from this passive income they
acquire other assets and grow more richer!!!
Exercises:
Ex: 1 Take a paper and pencil and draw the financial statement on it and
also draw your current cashflow pattern. Now, see that weather your current
cashflow pattern is that of rich and Ultra-rich? If yes than stick to it. If now
then think that how you can change it?
Ex: 2 Draw the Cashflow pattern of your friends, parents and family
members on paper and see that weather they are affording their luxurious
lifestyle from their Hard earned Active income or from the Asset Column
generated Passive Income.
Ex: 3 Teach the Cashflow Pattern or Rich and Ultra-Rich to your friends,
parents and Kids. If you are the young adult having kids than it is extremely
important to teach all of these Cashflow patterns to your Kids.
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Lesson: 6 The Power of Corporate Structure

The Rich teach their children the power of structure and various corporate
strategies since their early life and thats why their children use this power of
corporate structure to save more tax, protect their assets and even create
new wealth in the economy.
While Middle class dont know the power of the corporate structure and
thats why they dont impart any kind of financial education about the
corporate structure to their children.
To use the power of corporate structure, you need to be master in the
financial statements. You must have trained your mind to think in the
financial statements to use this power in your favour to grow rich.
You must understand the difference between the active and passive income,
assets and liabilities, Good versus Bad Debt and the Cashflow pattern of rich,
middle class, poor and ultra-rich. Without having the knowledge of these
things, you cant understand use the power of the corporate structure in
your favour to grow rich.
What is The Company?
Well, to understand the power of the corporate structure, you first of all
need to understand that what it means by a Company? All of you must have
heard the word Company right?
But Suppose what if I ask you that Do you own a Company?
What will you think in your mind if I ask you this simple question? Well, of
course by reading or hearing the word Company, in your mind huge
buildings, large infrastructure, huge machineries, huge offices, Big factories
and huge manpower will come.Am I Right?
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Diagram: 23 The Company is nothing but a file having some legal

documents in it.
Well, This is not the Truth. The Company is just a folder/file of some
legal documents of Company registration details and other company
incorporation certificates in it and nothing more than that.
Well, Yes. A Company is only a file of some legal documents inside it and
nothing else. It is not necessary that you must own huge buildings and large
infrastructure to start your own Company. You can register and start your
own company without owning anything by showing your home as your
company address. And even if you are living in a rental house, you can still
show it as your company office and register a company with your
government.
Registering a company is a fortnight process and it will require just few
thousand rupees of expense and nothing else.
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Anyone in this world can start his own company (A File having some legal
documents inside it) if he is a tax payer. And nothing else.
Diagram: 24 Individual & a Company has a different Financial

Statement
The Company has its own Financial Statement So owning your own company is not a big deal. You just have to consult
some corporate lawyer or the chartered accountant and he will do all the
legal formalities and documentations to start your own company.
Remember that for the law, The Company is the separate financial entity
just like you. So your company will have its own Financial Statement. So
once you own a Company, you will have now two financial statements in
your control Your and Your Companys.
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This is the trick. This is what actually rich people want. This is what actually
the rich people want to teach their children Means playing in the multiple
Rich people teach their children everything about the financial statement
because they want themselves and their children to play in the multiple
This is the real difference between the rich and middle class. Middle class
play the game of money in just one financial statement while rich play the
game of money in multiple financial statements and thats why,
- The Rich pay Less taxes than the Middle class
- The Rich can protect their Assets/Wealth very well
- The Rich can create new wealth (Printing your own money legally) in the
economy
In the subsequent lessons, I will explain you one by one that how exactly
rich people do this by using the power of the corporate structure?
What is The Corporate Structure & Corporate Strategies?
Well, the corporate structure is nothing but the arrangement of various kind
of companies with each other.
The Corporate strategies are nothing but the arrangement of the financial
statements of the rich and their various companies in such a manner that
this structure can save lots of tax, protect the wealth/assets of the rich and
can create new wealth in the economy.
In the subsequent lessons, We will see that how the rich use this power of
corporate structure and design various corporate strategies to grow
extremely rich?
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If you Want to Become Rich, Own as many Companies as Possible

Thus, it is clear that to become a rich, you MUST MUST need to own a
company. Then and only you will have multiple financial statements and by
controlling the cashflow between these multiple financial statements, you
will save more tax than the middle class, protect your assets and create new
wealth in the economy and become richer and richer.
So if you dont own a Company than first of all register at least one
company. First of all start playing in multiple financial
statements.
Remember that the company is the gateway of becoming rich and ultra-rich.
And yes, Dont worry. You dont need lakhs and crores of infrastructure to
register and start your own company. You just need few thousand rupees to
start your own company. After all a Company is nothing more than a
folder having some legal documents inside it.
Here are the 3 Powers of the Corporate Structure that Rich people use in
their favour to get Rich.
Power: 1 Save Tax
Power: 2 Asset Protection
Power: 3 Create New Wealth in the Economy
In fact, the Rich people teach their Children these 3 powers of the Corporate
structures since their school life. While during the same time, Middle class
people teach their children that how to find a safe and secure job and what
is the importance of doing a job?
While the Kids of Rich are learning the power of Corporate structure, the
Kids of Middle class are learning how to write a successful job letter and
getting approved for the dream job.!!!
Exercises:
Ex: 1 Consult some good Corporate Lawyer or Chartered Accountant in your
city and ask him about the charges and documents required to register a
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company. Dont worry. Most of the Accountants will advise you to not to
register a company. Dont believe in them. This is because they are nothing
but the middle class people. So even though they know everything about the
company registration, they dont know the above basic lessons on money.
Ex: 2 Now, decide the objective of your company. I mean in which sector
you want to start your business? You can consult your Corporate lawyer for
this.
Ex: 3 Teach your Children, Parents and Friends the power of corporate
structure. Teach and educate them that what is basically a Company and the
corporate Structure?
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Power: 1 Save Tax using corporate Structure

So now, you understand the power of the corporate structure. Rich own
companies and play in multiple financial statements and save lots of tax.
Middle class people work hard to earn more money. They focus on increasing
their income but they dont realize that the more money they will earn, the
more tax they will have to pay. While rich know the power of the corporate
structure and the advantage of playing in the multiple financial statements
since years and thats why they use this knowledge of the corporate
structure to pay less taxes.
In fact, today worlds many Fortune 500 companies are the ZERO Tax
Empires developed by their founders. These companies virtually pay little to
no tax in comparison to their annual revenues (Income). Let me explain you
that how the rich save lots of tax legally by owning a Company and how the
middle class struggle so hard to earn more money and still end up paying
lots of taxes.
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Diagram 25 Financial Statement of an Individual The Individual Pays Tax

First
See the above Diagram. The above diagram is of the financial statement of
the middle class. The middle class work very hard and focus all of their time
and energy to increase the income. And the higher they earn money, in the
higher tax brackets they will fall and the higher tax they will pay.
Different Tax Laws for the Individual and a Company
For the Individual and for a Company the Tax laws are different. Well, yes.
This is true. For Rich, the tax laws are different while for the middle class
people, the tax laws are different. And the tax laws favour the rich people.
Here is the difference between the tax laws for the individuals and the
companies.
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The Individual will have to pay Tax FIRST from his Income. And after paying
the tax, whatever remains at the end, the individual can spend. Thus, for
the Individual the first expense is the Tax. While the Company will have
to pat Tax LAST from its Income after deducting all of its expenses. So For
the Company, the Tax is the last expense.
Diagram: 26 Individual & Company Financial Statement The Individual

pays tax first while the Company pays the tax last.
Thus, whenever the middle class receive a paycheck, some amount of
money is already deducted from his paycheck every month as a tax even
before he sees that money.
Now, Let us understand how Rich use this knowledge of tax differences
between the companies and the individuals. Let us discuss it with one
Example.
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Diagram: 27 Financial Statement of a Middle Class Doctor

The above statement is of a doctor earning high Income. This doctor earns
Rs.1 Crore every year from his medical practice. See in the above financial
statement the income of this doctor. He earns Rs.1 Crore from his medical
practice by working at some multi-speciality clinic.
The problem is that, this doctor is well educated but dont have any
knowledge of the financial statements, assets, liabilities and the power of the
corporate structure. This is because he comes from the middle class family.
And his parents had taught him since childhood that to become rich, he will
have to work hard at school to get admission in the medical school and after
that becoming a doctor, he will have to work hard to earn more money. And
thats why this doctor works very hard and focus his all the time and energy
to increase his income.
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Now, see in the Expense column of the above financial statement. This
doctor falls under 30% Tax bracket. And thats why every year, he will have
to pay Rs.30 Lakhs as a tax to the government first. The Tax is the first
expense of this doctor. And after paying Rs.30 Lakhs, only Rs.70 Lakhs
remains at the end and from this 70 lakhs, he will have to do all of his
expenses.
Thus, this doctor earns very high and people also think that he is earning
very high so he is rich. But the reality is that, he end ups paying lots of
taxes from his hard earned money. This is because he receives all of his
income on his own financial statement and thats why very little money goes
towards long term investing and building some serious wealth in comparison
to his income.
Diagram: 28 Financial Statement of a Rich Doctor

Now, see the above diagram. The above diagram is of a Doctor who is
coming from the rich family. He also earns Rs.1 Crore a year just like Doctor
1. But he comes from the rich family. And thats why since his childhood his
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rich parents have imparted the basic lessons of money, financial statements,
assets, liabilities and the power of the corporate structure to him.
And thats why this doctor has decided to play the game of money like rich.
This doctor has decided to play the game of money in the multiple financial
statements to use the power of corporate structure and to save more tax
than Doctor 1.
See the above diagram. This second doctor owns his own Company XYZ
Health Care Private Limited. So he plays in two financial statement His
own and his Companys. Thus, he has shown on paper that he is the
employee of his company and receives salary from his company every
month. And he receives all of his medical practice income in the name of his
own Company XYZ Health Care Private Limited.
Thus, the multispeciality Hospital in which he works issue all of his payments
in the name of his own company via cheques and bank drafts. Thus, every
year he receives his entire 1 Crore income on the financial statement of his
own Company XYZ Health Care Private Limited.
Now, as you know that the individual has to pay tax first and the company
has to pay taxes last. So to save tax, what this doctor do is, He takes only
Rs.50000 of monthly salary from his own company. And keep rest of the
money in his own company. So How this will benefit to save the tax?
Well, This will benefit like this. He receives just Rs.6 lakhs of annual income
on his financial statement in the form of salary from his own company even
though he himself makes all of this 1 Crore. And the rest Rs.96 lakhs will be
in the financial statement of his own Company.
Now, at the end of the year, he will have to pay 30% tax on his 6 lakh
income and that is just Rs. 1.80 Lakhs. Now comes the company tax. So as
you know that for the company tax is the last expense. This is because the
tax laws favour the rich and the companies. For the companies, all the
expenses are tax deductible.
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So What he will do is,

- His newly bought car will be shown as his Business Vehicle
- His New Laptop will be shown his Business Equipment
- His International and Domestic Travels will be shown as his Business
meetings and Business travels
- His Investments will be shown as the Capital Expenses to expand his own
Business.
- And so on.
And from this 94 lakhs, his company will do almost 90 lakhs of expenses
mostly to acquire new assets (Stocks, Bonds, Gold, Real Estate, Mutual
Funds) and other lifestyle and travel expenses and at the end only 4 lakhs
will remain and on this 4 lakhs his company will pay 30% tax and that will
be Rs.1.20 lakhs only.
Thus, his total tax liability will be Rs.1.80 + Rs.1.20 = Rs. 3 Lakhs Only!!!
Thus, the Doctor 1 and 2 both earn the same amount of money. But first
doctor ends up paying Rs.30 lakhs of tax while the second ends up paying
just Rs.3 lakhs of tax.
This is because the second doctor has the knowledge of the power of the
corporate structure. His rich parents have imparted the knowledge of the
financial statements, assets, liabilities and the power of the corporate
structure in him since his school time. And thats why he learned from his
rich parents to play the game of money in multiple financial statements.
While the first doctor learned from his parents to work hard for money to
earn more income and play the game of money in the single financial
statement only. He doesnt have any knowledge of financial statements,
assets, liabilities and the power of the corporate structure and thats why he
ends up paying 10 times more than the Rich Doctor.
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Diagram: 29 Financial Statement Large Corporations ZERO TAX

STRATEGY
Today worlds biggest companies and businesses are the ZERO Tax empires.
They pay little to no tax to the governments by using this strategy. This is
because everything the companies of rich people earn will be spend to either
expand the business, to acquire more assets and to support the lifestyle of
the owners of those companies and later on shown as Business Expansion
expenses, Business Equipment expenses and Business Vehicle Expenses.
Remember, that it is the middle class people in any country who pay the
highest tax. While rich people are those who use this knowledge and pay the
least tax legally by using the power of the corporate structure.
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So Start playing in multiple financial statements and save more tax legally
like rich.
Summary
01) Rich receive all of their income on the financial statements of their own
companies. They do everything in the name of their own companies and
they themselves take very little salaries from their companies on their own
financial statements and pay very little tax. They use the income of their
companies to acquire more and more assets as a pre-tax expenses and pay
almost nil tax from their companies. Because nothing left at the end of the
year on their companys financial statement to pay any tax.
02) Middle class people depend on the government tax breaks which are
very minimal. Say for Example, In India the Individual tax breaks under
Section 80C are just Rs. 1 Lakh maximum. And these middle class focus
their all the time and energy to save this 1 lakh of tax every year. This is
because they play in the single financial statement and that is their own
financial statement. While Rich think big and play in multiple financial
statements and use the power of corporate structure to pay less taxes and
acquire more assets.
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Power: 2 Asset Protection Using Corporate Structure

The second power of the corporate structure is Asset Protection. Rich
protect their Assets/Wealth by using this power of the corporate structure
very well from following events.
- Divorce
- Sue
- Legal law suitsetc
Only Building the Asset column is not sufficient to become rich. You will also
need to protect your assets from events like Divorce, Sue and Legal Law
Suits.
This is because the richer you will get, The more people will look at your
assets and try to grab your assets from you by illegal or fraudulent ways.
High Income Earning Middle class people dont have any kind of financial
knowledge to protect their assets while Rich know that how to protect their
assets very well.
How Rich Protect Their Assets by Using the Corporate Structure?
Well, Here is the secret of how rich protect their assets using the corporate
structure. Well, as I have already told you in the previous lessons that rich
play the game of money in the multiple financial statements to save tax.
Now, another advantage of playing the game of money in multiple financial
statements is, Rich dont own any Asset in their own name. But they own
everything in the name of their companies. And thats why during the time
of Divorce, sues or legal law suits, Every Asset that the rich have build
during their entire life are owned by their companies. And companies are the
separate financial entities according to laws. Thus, the Asset Column of the
Financial Statement of the rich is empty. It does not contain any asset.
While all of their assets are owned by their own companies.
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In other words, Rich develop their assets in the asset column of the financial
statements of their own companies. Thus, Rich own nothing in their own
name but they own everything in the name of their companies. They legally
dont own any asset. But they just control the assets via their ownership
control over their companies.
Example Let us discuss this by one simple example. Akshay has started his own
Restaurant Business. But he come from the typical middle class family so he
doesnt know the power of corporate structure and importance of playing the
game of money in different financial statements.
And thats why His Financial Statement will look like this.
Diagram: 30 Akshay owns his Restaurant building in his own name.
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In the above financial statement, Akshay owns his Restaurant Building (Real
Estate) in his own name. And thats why the Asset column of his financial
statement shows his restaurant building as an asset.
He also do all the investments like Stocks, Bonds, Gold, Mutual funds..etc..
in his own name. And thats why you can see all of these assets in his own
financial statement.
Most of the Small Business owners play the game of money like this only.
They own everything in their own name which is very risky. They dont know
that in the event of divorce or Sues, their Asset column will be affected.
Legal law suits will directly affect their asset column.
One day, one of his regular customer did a sue on Akshay. And he end up
losing his entire restaurant building to settle that sue.
Now, take the Example of Sandip. Sandip has also recently started his own
restaurant business. But he comes from rich family and his rich parents had
taught him since his childhood the power of corporate structure.
And thats why he understands the power of corporate structure and decided
to play the game of money in multiple financial statements to save tax as
well as protect his assets. Here is the Corporate structure that Sandip has
developed to protect his core asset of his Restaurant Business Restaurant
Building.
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Diagram: 31 Financial Statement of Sandip A Smart Business

Owner
Sandip has registered two companies before starting his restaurant
business. As you now know that a company is nothing but a file/folder
having some legal documents in it and nothing else.
So Sandip has registered two companies A Food Business Company & a
Real Estate Company. So the Financial statement of Sandip will look like
this.
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Diagram: 32 Financial statement of Sandip showing controlling shares of

his 2 companies.
See the Diagram No.2. In the diagram 2, the restaurant building of Sandips
Restaurant business is owned by his own Real Estate Company. And his own
Food Company which will do the restaurant business will be shown as on
rental basis.
Thus, the Food Business company pays rental to his own Real Estate
Company which owns his restaurant building. Thus, every month all the
profits from his food business company is siphoned out into his real estate
company.
You can see that there are no assets in the asset column of the financial
statement of his Food Business company. And all the profit is siphoned out
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from his food business company to his real estate company which owns his
restaurant building. And this real estate company is used to do his various
real estate and other investments.
Thus, it is the real estate company of Sandip which owns his every asset
mainly real estate. And thats why Sandip doesnt own any asset in his own
name but in the name of his real estate company.
One day, one customer of his restaurant sued his Food Business company
because of the quality of food. But well, his food business company did not
have any assets in its asset column and ultimately gone for the Bankruptcy.
Now, what happened to his Bankrupted Food Business Company?Nothing.
After all it was just a file having some legal documents of his company
registration inside it.
So after few weeks, Sandip registered a new food business company and
again started his restaurant business in the same restaurant building owned
by his own real estate company. The only thing was changed was the name
of his restaurant.
This is how the rich protect their Assets.
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Diagram: 33 Asset Protection Strategies of Ultra-Rich (Billionaires)

How Billionaires protect their Wealth?
Billionaires and the founders of Fortune 500 companies protect their assets
just like the above way. The only difference is that, the above is the over
simplified example.
Billionaires and the founders of the fortune 500 companies play the game of
money in literally hundreds of Financial Statements. They have registered
literally hundreds of companies and their assets are owned by their
hundreds of companies and not by them. And thats why during the sues,
their assets become protected Bullet-Proof".
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So if you want to protect your Assets like rich than learn the power of the
corporate structure and play the game of money in multiple financial
statements.
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Power: 3 Create New Wealth in the Economy using the Power of

Corporate Structure Print Your Own Money Legally
This is the ultimate power of the corporate structure. You can create new
wealth in the economy if you have the knowledge of this power. In Laymans
language, You can print your own money in the economy legally by using
the corporate structure.
Rich are wealth builders while the Ultra-Rich (Billionaires) are the wealth
creators. Billionaires are billionaires not because they have earned billions of
dollars by their companies. They are billionaires because they have printed
billions of new dollars in the economy legally by using the power of
corporate structure.
Bill Gates is a Forbes Billionaire and worlds richest person having net worth
of US $ 60 Billion not because he has earned $ 60 Billion in his life via
Microsoft. This is because he has printed $ 60 Billion from his Microsoft.
So How Ultra-Rich create new Wealth in the Economy by using the power of
corporate structure?
How you can print your own billions of dollars legally in the economy by
using the corporate structure?
Well, You can create new wealth in the economy (Print your own Money) by
developing a successful business by registering a company and later on
taking that company to the public and by selling the stocks/shares of your
company to literally millions of people, you can create new wealth in the
economy and become a multi-millionaire or even a Billionaire.
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Diagram: 34 Middle Class Work Hard For Money

The secret of printing your own new money in the economy legally is taking
your business to the public and listing it on the various stock exchanges in
your own country as well on the stock exchanges of other countries.
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Diagram: 35 Rich Make Their Money Work For Them (Investments)
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Diagram: 36 Ultra-rich (Billionaires) Create Their Own Money

Middle class spend their whole life to buy shares of other companies, invest
in mutual funds, diversify and hold for the long term. But well, Kids of the
rich people have been taught since their childhood that they can not
become ultra-rich by simply buying the stocks of someone elses
companies but they can be ultra-rich by selling the shares of their
own companies to literally millions of other rich and middle class
people. And thats thy this knowledge of the power of corporate structure is
imparted to the kids of rich people since their childhood by their parents and
mentors.
While the Children of Middle class people are studying hard in the
school and forced by their parents to work hard to get good grades
so that they can find a good job or a profession (Doctor, Lawyers),
the parents of rich business community are teaching their children
this ultimate power of corporate structure How to Print your own
money Legally?
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Rich know since their childhood this secret of corporate structure. Rich have
been taught by their parents and mentors since their school time that the
real power of the corporate structure is One can print his own money by
developing a business and later on taking that business to the public. And
thats why since early life, ultra-rich people focus only on developing a
successful business and later on taking that business to the public.
Middle class dont have such kind of financial knowledge. For them, the
Billionaires are billionaires because they are hard workers. For Middle class,
Billionaires have earn their billions of dollars by doing businesses. But well,
the Truth is that, these billionaires have printed their own new billions of
dollars in the economy by taking their businesses to the public.
Bill Gates (Microsoft), Larry Page (Google), Dhirubhai Ambani (Reliance),
Lakshmi Mittal (Arcelor Mittal), Mukesh and Anil Ambani (Reliance), Michael
Dell (Dell) and all the other Forbes Billionaires are billionaires because they
have developed successful businesses out of scratch and later on taken their
businesses to the public. And by selling the partial ownership (Shares) of
their companies to literally millions of small to large investors, they became
billionaires.
These
people
are
now
billionaires
because
their
own
stake
(Ownership/Shares) in their own publically listed companies/businesses are

worth of Billions making them billionaires.
Bill Gates is a Billionaires because his 8% Stake in his own publically listed
Company Microsoft is worth of Billions. Mukesh Ambani is a Multi-Billionaire
because his own stake in Reliance Industries is worth of Billions of Dollars.
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Diagram: 37 Billionaires Are Wealth Creators

These Billions of Dollars are not earned by their owners. But these
Billions of Dollars are printed legally in the economy by their owners.
These Billions of Dollars are the VALUATIONS of the stake of the
billionaires
in
their
own
publically
listed
companies/businesses/corporations.
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Diagram: 38 Middle Class Earn Money, Rich Make their Money Work
for Them & Ultra-Rich print their own money Legally
Middle class people think that these people are lucky because they have
EARNED billions of dollars in their lives. But well, the Truth is that, these
are the Wealth Creators. And by using the Power of Corporate Structure,
They have PRINTED Billions of Dollars by taking their Businesses to the
Public.
Remember that, Nobody can earn billions of dollars in their lives. Very few
people like Tiger Woods, The famous Golf Player can earn a billion dollar in
their life time. But well, to earn this much, Tiger Woods will have to pay lots
of tax and ultimately he wont stay long in the billionaire club. If you want to
become ultra-rich (Billionaire) in your life than you will have to simply print
this much of new money in the economy legally by using the power of the
corporate structure.
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Now, let us discuss in Financial Statements that, How Rich people create the
new wealth in the economy by using this knowledge about the corporate
structure.
Let us discuss that what rich people teach their children about corporate
structure in financial statements that their children become billionaires ?
So Here we Go..!!!
Diagram: 39 Financial Statement of Rich Individual (Rich and his spouse)

& his own Company
The above is a corporate Structure that a typical rich use. I mean the rich
play in the multiple financial statements. In the above diagram, you can see
total 3 financial statements of a rich person. One is his own financial
statement (Individual), the second is the financial statement of his wife
(Individual) and the third is his Companys Financial Statement.
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This rich couple has promoted a company. As you know that A Company is
nothing but a file having some legal documents inside it and most of
the time this file remains in the drawer of your desktop.
You can see that, the Husband owns 90% shares of the Company in the
Asset column of his Financial statement while the wife owns 10% shares of
the Company in the Asset Column of his Financial statement.
Thus, right now the whole the company is fully owned by this couple 90%
by a Husband and 10% by a wife.
Diagram: 40 Shareholding Pattern of the Company Right now all the

shares are owned by rich and his spouse.
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Now, see the above diagram. This is the pie diagram showing the
shareholding pattern of the company. You can see that right now there are
only two owners of the company 90% Owner is Husband and 10% owner
is a wife.
Now, the couple works hard for a decade to develop a business, hire people
of various skills under their company and grow their business. After working
hard behind their company for a decade, they plan to become extremely
wealthy. So they plan to take their company to the public.
They have plan to sell the 30% of their company to the public. Ok So What
happens is the couple sells 30% of their company to the public? What will be
the new shareholding pattern of a company?
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Diagram: 41 Shareholding pattern after selling 30% of the company

So after taking a company to the public and selling 30% of the shares of
that company, the new shareholding pattern can be like above.
The Husband will have 65% stake in his new listed company (Because he
sold his 25% shares to the public) and a wife will have 5% stake in her new
listed company (Because she sold her 5% shares to the public). And the
public will have 30% of the shares.
Now, you will ask that then how a Husband can become a Billionaire by
selling just 25% of his shares? Well, the founders of the publically listed can
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become billionaires anytime when the share price of their listed companies
go high and the valuation of their own stake in their own listed companies
cross the 1 Billion mark.
Say for Example, post listing the valuation of the 65% stake of this Rich
person is US $ 500 Million and he sold the shares to the public at $ 10 per
share. And now, after few years the share price of his company doubles to $
20 because of the good financial results of the company, then his net worth
will also double and cross the $ 1 Billion mark.
Thus, by taking his business to the public, his net worth shoot up to $ 500
million which now become $ 1 Billion because of the rise in the share price of
his own listed company. And this additional $ 500 Millions are printed newly
in the economy because the share price of his listed company doubles in few
years of listing. This is not the hard earned money. But this is the Valuation
of his Asset (His stake in his listed company) going up. And this is the newly
printed money in the economy. So every time the share price of the owners
of the listed companies go up, the new wealth is created in the economy and
they get richer and richer.
This is how the ultra-rich print their own money in the economy legally.
[ Important NOTE: The above is the over-simplified example of taking a
business to the public. In the real life one more stage will come in between
before taking your business to the public and that is the stage of Angel
Investors or Venture Funding. Once you develop a successful business at
small scale, you will have to go for Venture Capital Fund to raise money for
your business. Venture Capitalists also known as Private Equity Players will
infuse capital in your business to make it sufficiently large that you can take
it to the public and hit the stock market. So if you seriously want to become
a billionaire in your life than keep this step in your mind. After developing a
successful business at small level, go to the Venture Capitalists first and
convince them to invest in your business. Taking a Business to the public is
the third and last step. Here for the simplicity of the discussion, I have
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omitted this very important step. But the serious readers should always keep
in mind this step. Once you develop a small business, search for venture
capitalists and angel investors in your own city, state or country and try to
negotiate the terms with them.]
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The History of Money, Gold Standard & Modern Banking

The History of Money, Gold Standard, Modern Banking and taxes is very
important to understand the basics of money and learning important
financial
lessons.
The
History
of
money
is
very
interesting.
And
understanding the history will help you to answer many of your financial
queries.
The History of Money and Modern Banking System evolved like this.
01) Barter -
This kind of trading is since the history of mankind. It is older than 9000
B.C. Bartering means exchange of goods with each other rather than money.
There was not any concept of money at that time. So suppose if you give 3
eggs to the shoe maker, he will give you a pair of shoes. And if someone
gives you 2 chickens, you will provide them some kind of goods or service.
This is how people used to trade.
But unfortunately the problem with such kind of system was that, how can
you say that 3 eggs are equal to a pair of shoes? Thus, there were several
disputes in such kind of trading.
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02) Cowry Shells A Trade currency After that in 1200 B.C., China started trading in Cowry Shells. Thus, these
Cowry shells were the first currency just like a bank note in your pocket.
After that Cowry has served as a medium of exchange and served as money
through out the history until the middle of 20th Century.
03) Silver&Leather Currency In 500 B.C.m Silver started first time as a medium of currency.
04) Gold Coins as a Currency Now, the real history of money started. In around 200 B.C., Gold started as
a currency. The Emperors started gold coins as a trading unit. And thats
why every good or service in the economy had some value that was equal to
some amount of gold.
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Gold and silver were an integral part of business and trade as far back as the
early civilizations of Sumer (the land between the rivers Euphrates and Tigris
in what is now Iraq) and Egypt.
But up to the 6th Century BC, the gold was traded as weight of the metal.
But the first coin was made in 6th Century BC.
And thus, The Gold was the First Real Money. It is because the gold was
the valuable metal. And it was not easily available in the world. And thats
why it was unique and the chances of counterfeiting were less. And thats
why the gold started as a trading unit.
After that, Gold became the world wide accepted currency.
As the Civilization, evolved, the transactions became large sized and thats
why
huge
amount
of
gold
started
trading
and
changing
hands.
Unfortunately, the gold is a heavy metal and thats why transferring gold
from one country to another country with safety was very difficult.
And thats why traders started the new concept and that was, they started
depositing their gold with the reputed jewellers and in the exchange of that
the jewelleres started giving them the on paper signed paper stating that
this paper owner will be paid this much amount of gold instantly. And this
was the first paper money.
Thus, the first bankers were jewellers. After that, people like this concept so
much that they started depositing their gold with the jewellers and started
taking paper money from their jewellers. And this is how over the time,
paper money had took over the entire trading system and gold just became
the idle asset sitting in the bank reserves.
1816, The UK started the Gold Standard In 1816, the UK started the Gold Standard means any currency is valued
with some amount of gold to protect it from the inflation. And thats why the
original bank notes were backed by some amount of gold and you would be
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able to exchange with your bank for gold if you dont have any trust in the
bank notes of your government bank notes.
This is how the inflation used to control.
Saving Money was the Golden financial Advise during the Gold
Standard Thus, During the Gold Standard, Saving money was the Golden financial
advise. And thats why your parents and grand parents used to teach you to
save money.
This is because during the gold standard, saving money means saving gold,
the real money. And thats why if you save money during the gold standard,
you definitely become rich and not only this but you also stay rich.
1971, The USA removed the Gold Standard In 1971, President Nixon had removed the Gold Standard and thats why the
US Dollar stop became money any more but it became debt. President Nixon
in 1971 declared that,
The United States will no longer redeem their dollars with the gold because
the US Dollar is backed by the full faith of the US Government
This means that after 1971, the US can print as much money as it want
according to the need of the economy. Thus, today the Dollar is a piece of
paper without having intrinsic value in it. And this was the cause of
Inflation.
And after that the entire world had removed the gold standard from their
currencies. Today very few countries follow the gold standard.
After 1971, Savers are Losers Thus, After 1971, the rules of money have been changed. This is because
the modern money is not a money in the true since. The Modern money
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does not have any gold back up. Your government can print it as much
according to the need of the economy.
So today if you save money than it means that you are saving depreciating
item which will lose its value over the period of time making you poor.
Today Asset is more valuable than money. So the Modern Financial
Advise after 1971 is Save & Invest.
Today also you save money but dont forget to invest that money otherwise
the inflation will erode its purchasing power.
How the Modern Money is Created by Banks? The Fractional
Reserve Banking So now, you know that your money is not a real money after 1971 and it is
a debt now. So have you ever think that how the modern money is created?
Well, whenever you, your government or any business in your country takes
any kind of debt/loan, the new money is created in the economy at that time
and when you pay off your debt, that money disappears.
This is known as Credit System.
Suppose you have a credit card in your pocket and you swipe it for $ 100, at
that time the $ 100 is created newly in the economy. You feel that your bank
has given you this money from its own pocket. But it is not the truth. This $
100 is newly created because you have borrow it to buy something.
Whenever you take a car loan, home loan or any other kind of loan, that
money is newly created in the economy. This is because previously this
money was not in the economy.
Whenever a Government borrows money by issuing bonds, the new money
is created. Thus, whenever you or the government or the businesses in the
economy borrow money, the new money is created in the economy our of
thin air and pushed into the circulation. And this newly printed money dilutes
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the purchasing power of the existing money in the economy by causing the
inflation.
Rich Know How to Create New Money by Using Good Debt & to Get
Richer Rich people know that after 1971, the rules of money have been changed.
And thats why get out of debt and never borrow money from anyone is now
no longer an effective financial advise to get rich.
In fact, after 1971, two types of debts created in the economy Good Debt
& a Bad Debt.
Any Asset producing debt was a good debt while any liability producing debt
was a bad debt. Thus, What Rich do is, by borrowing money to acquire
assets, they print new money in the economy. And after paying this debt
they become the owners of the valuable assets and get richer than ever.
Rich never afraid of taking a good debt. While Middle class in this world still
think that a debt is bad. In fact, all the financial advises today are age old
financial advises. They will tell you to not to borrow money and get out of
the debt.
Well, this advise is partially true today. Means You should get out of bad
debt and stay away from bad debt only. But you should take as much as
good debt to acquire more assets and getting richer.
Fractional Reserve Banking Today the new money is created in the economy by factional reserve
banking. Means banks can lend 10 dollars for every 1 dollar of deposit.
This means that suppose if you deposit $ 100 in your bank than the bank
can give $ 1000 amount of loan. But well, if you deposit just $ 100 in your
bank than from where did this additional $ 900 come from?
Well, This additional $ 900 are created out of thin air. In other words, these
additional $ 900 are created newly out of thin air.
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So bank will give you 4% interest every year on your $ 100 deposit. And
that is $ 4 every year. Now, the bank will lend $ 1000 to the people for
various purposes and charge 10% interest rate. So the bank will make $ 100
every year from this $ 1000.
Thus, from your deposit of $ 100, you will make $ 4 every year and the bank
will make $ 100 every year from it. This is known as the fractional reserve
banking.
In 2008, the US Government has printed US $ 1.2 Trillion out of thin

air and pushed it into the circulation. You can see the massive
expansion of US Monetary base in the above diagram.
Thus, since 2007, the US Monetary base has been expanded from $ 800
Billion to US $ 2 Trillion. So How Fed Chairman Bernanke printed $ 1.2
Trillion out of thin air?
Well, in the normal condition when the US Government issues the Treasury
Bonds, the investors and countries around the world buy it like China, India,
Japanetc.. And this is how the new money is created by borrowing it from
the others.
But $ 1.2 Trillion is such a massive amount that there was virtually no
demand of US Treasury securities by other countries of the world and thats
why the US Government has issued Treasury bonds worth of $ 1.2 Trillion
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and the Federal Reserve has bought it from the US Government and created
$ 1.2 Trillion.
In other words, the US Government has printed treasury bonds and
itself has bought the same bonds. In Laymans Language, the
troubled bank has printed its own money and give the loan to itself.
Moral of the Story:
This is how the modern money is printed in the economy today. Central
Banks and Governments from all around the world are printing money out of
thin air and pushing it into the circulation.
So What Should be the Financial Advise for you?
Well, the Asset is always more valuable than the modern paper money. The
modern money is a paper money. Its not the real money. So if you are the
owner of some kind of asset than never sell that asset. Because the asset is
something which is likely to appreciate but the money will depreciate
because of the inflation.
Acquire more and more assets out of your money. Save money but dont
accumulate money. Rather than that use your saved money to buy assets
and grow the asset column of your financial statement.
The moral of this entire article is that, You should focus on creating and
acquiring assets in your life. Never focus on earning money. But spend your
time and energy to create and acquire assets. This is the only way to
become and stay rich for generations to generations!!!
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Asset is More Valuable than Money

Which is more Valuable Asset or Money?
For the Rich, Asset is more valuable than money (Now Currency) while for
everyone else, Money(Currency) is more valuable than the Asset.
Let me explain you why Asset (Stocks, Bonds, Gold, Real Estate, Mutual
Funds, Businesses, Web Properties, Intellectual Propertiesetc.) is more
valuable than money?
Well, This is because Asset is something which keeps appreciating in its
value forever while money is something which will lose its purchasing power
over the period of time because of the inflation.
In 2003, the Gold price was US $ 300 per ounce and in 2010, it is $ 1200
per ounce. This means that in 2003, you would able to buy the some
amount of goods and services for $ 300 and today in 2010, you can buy the
same amount of goods and services for whooping $ 1200. And this is the
depreciation of money by four times in just 7 years because of the inflation.
So it means that if today (In 2010) you have $ 1200 in your pocket than
after 10 years, you wont be able to buy the same amount of goods and
services in the economy. But if today you have 1 ounce of gold (Or any
other Equivalent Asset such as stocks, bonds, real estate, websites, blogs,
art, mutual fundsetc..) in your pocket than even after 10, 20, 50 years you
will be able to buy the same amount of goods and services from the
economy. In fact, you will be able to buy much more amount of goods from
your assets in the future.
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Diagram: 48 - Old Financial Advise Save Money. Modern Financial

Advise Save & Invest Money
In other words, Assets preserve and increase your purchasing
power. While money reduces your purchasing power because of the
inflation.
And this is the reason why Rich people focus on the Asset column of their
financial statement rather than the Income (Like Middle Class people) and
accumulate more and more assets out of their money.
Rich buy assets in exchange of their money while middle class save and
accumulate money thinking that one day they will become rich. See the
rules of money have been changed after 1971 when the US president Nixon
has removed the Gold Standard and made US Dollar the free float currency
and later on the entire world has removed the gold standard.
Middle class people are savers and the savers are losers because the money
that you save in your bank accounts will eventually lose its purchasing power
over a period of time because of the inflation making you poor.
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So the smart thing is to create or acquire assets. Rich people know this
secret of money and assets since their early life and thats why from very
early life they spend their time and energy to either create assets or acquire
assets out of their money. Whenever rich have surplus money on their hand,
they simply buy assets out of their money. They keep accumulating more
and more assets in their asset columns rather than saving more and more
money like middle class.
In True Sense, Money is not your Asset but its your liability. This is
because your saved money which sits idle into your bank savings accounts
will ultimately lose its purchasing power and the value because of the
inflation.
While the Asset not only beat the inflation but also appreciate in its value as
well as provide you a steady passive income. Thus, acquiring assets is one
time hard work and after that weather you work or not, money will keep
flowing into your bank accounts (Passive Income).
While Saving money is a life long process. No matter how much you save, if
you are not going to buy assets from your saved money than ultimately you
are going to be poor in spite of how much you save.
Rich teach their kids since their childhood that the Asset is more valuable
than money and thats why they should always think to grow the asset
column of their financial statement rather than focusing on the Income
(Active Hard Earned Income).
While Middle class people teach their kids since their childhood to focus only
on the income and nothing else. And thats why they force their children to
work hard at school to get good grades and after that find a safe and secure
job and work hard at the job place to earn higher monthly income. The
middle class people think around the Income. They focus their time, energy
and mind to increase their Income. And to increase their income they take
more and more educational degrees and work over time at their jobs or take
part time jobs to increase their income.
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But they dont know that this is the active income and the day they will stop
working for their active income, their entire income stream will be suddenly
disappear. Plus their saved money will also lose its purchasing power over
the period of time. The inflation will erode the purchasing power of their
money.
While Rich know that Asset is more valuable than the Income and thats why
they focus their mind, time, money and energy to create and acquire more
and more assets and grow their asset column. They also know that building
the Asset column is thee one time hard work only and after that their Asset
column will generate passive income for them to maintain which they wont
have to work any more.
So after building the Asset column, even if the Rich will stop working, the
money will still keep flowing into their bank accounts for the rest of their
lives and even after that.
So if you want to become rich than give more importance to create and
acquire assets. To become rich, you need to focus on growing the Asset
column of your Financial Statement. By only saving lots of money, you can
not become rich. But to become rich, you need to acquire assets out of your
saved money.
One most common and age old financial advise in this world is Live below
your means. It means that spend less money than you earn. Most of the
people spend more than they earn by scratching credit cards and taking
excessive bad debts like personal loans, car loans and shopping EMIs. And
thats why finance gurus from all around the world teach their children to
live below their means. They advise people to spend less than they earn. So
that they can save more money. But This Financial advise was effective once
upon a time in this world means before 1971. But after 1971, this Financial
advise is no longer effective to ensure any kind of financial success in your
life because USA has removed the Gold Standard (The Gold Back up to the
Dollars) in 1971. In fact, if today you follow this advise and save lots of
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money than you will surely be in financial trouble in the future. Because you
are accumulating (Saving) Something (Money) which is going to depreciate
over the period of time because of the inflation. And thats why the Modern
Financial Advise is Dont Live Below your means. Spend most of
your money to create or acquire assets and grow your asset column
so that in the future your Asset column generates passive income for
you which can make you financially free and rich.
Asset is Always more Valuable than the Money.
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Myth: 1 Go To School to work hard, get good grades & get a good job
Reality: Go to School But not to get good grades to get a good job
once you leave the school but to learn the basic vocational education
only.
This is one of the most commonest Myth among the Middle class people.
They set a mindset to their children since their childhood that going to
school, work hard and getting a good job once you leave your school and
college is the ultimate way of financial success in anyones life.
And thats why since childhood, their parents force and punish them to work
hard at school and dont let their kids to focus on anything else except the
school education.
While Rich people know that School education is very important but not for
getting rich and financially free but for the vocational education only
(Languages & Mathematics). Our Schools give us two kind of Education.
01) Vocational The skill of reading, writing and calculating the numbers
and sums.
02) Professional In Colleges they give us some kind of professional
education such as Medicine, Engineering, Software, Lawyers, Art..etc..
Rich know that the Schools (& Colleges) are lacking in one kind of Education
and that is --> Financial Education The knowledge about What is Money, How it Works
and the Power of the Corporate Structure and thinking in Financial
Statements and understanding the meaning of basic financial terms like
Assets,
Liabilities,
Active
&
Passive
Income,
Good
&
Bad
Expenses/Debtetc
Why Schools dont teach us Financial Education?
The only thing that I learned from my school about money, Business &
Investing was It is Risky.
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While when I entered into the real life, I realized that not having Assets
(business and investments) in the Asset Column of the Financial Statement
is Risky. In fact, today my school mates whose parents have build Asset
columns (Stocks, Bonds, Gold, Mutual Funds, Businesses, Real Estate..etc..)
for their children are more financially safe and secure than me and those
children whose parents have taught them to depend on the job security.
Diagram: 46 - Middle Class Work Hard to Earn Money While Rich

Work Hard to Develop Businesses
Schools are training people to become Employees to work for the
Businesses owned by Rich People.
This is because our age old school system is designed and manipulated by
the rich people of the starting of the Industrial age (1800). During the
starting of the 19th Century, the industrial age was started in Europe and
the rich industrialists of that time needed people of various specific skills in
mass volume to run their industrial age businesses. And thats why they
have decided to take the financial education out of the school system so that
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the people who work hard in the school can never become more than
employees of the large corporations.
Rich people of the world still know this history and the facts about the school
system. They know that Schools are important for the vocational education
like languages & Mathematics but the schools are not the right place to learn
the financial education The knowledge about how money works.
And thats why the rich people impart the financial knowledge to their kids
separately along with their school education.
Thus, the school system is designed to brain wash the young generations to
think only about becoming employees & Self-employees once they leave the
school and work hard for the rich who own the businesses.
Ultra-Rich (Billionaire) people are High School or College Drop outs
The Following famous Billionaires & Entrepreneurs are the high school or
college drop outs. And still they have made a fortune and become rich. This
is because the school fail to change the mindset of these entrepreneurs
because these entrepreneurs have left the schools and colleges before the
education system can change their mindset and turn them into the
employees.
- Bill Gates Microsoft
- Steve Jobs Apple
- Michael Dell Dell Computers
- Dhirubhai Ambani Reliance
- Henry Ford Ford Motors
- Larry Ellison Oracle
- David Neeleman Jet Blues
- J.D. Rockefeller Standard Oil
- Ray Kroc McDonalds
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- Ralph Lauren Polo

- Tom Anderson MySpace
- Mark Zuckerberg Facebook
- Larry Page Google
- Walt Disney Disney Land
- Thomas Edison General Electric
- Jerry Yang Yahoo
- Subhash Chandra Zee Networks
- And many many more
Your Financial Statement is your score card once you leave your
school. This is because it shows that how smart you are smart with your
money. Your Banker will give you a loan not by watching your educational
degrees but by watching your financial statement and thats why rich teach
their children the basics of financial statement and develop the habit of
thinking in the financial statements.
Moral:
The moral is that, Motivate your children to go to school to take the
vocational education. But dont force them to work hard to become
employees and work like a slave at rich peoples businesses.
Rather than that, also teach your children the basic lessons of money during
their school time that the rich people teach their kids. So that in the future
they can also become rich and financially free.
So rather than focusing and working hard only on getting good grades in the
school, it is advisable to become financially smart. It is advisable to be smart
with your money also. So that when you enter in the real world, you dont
have to live paycheck to paycheck.
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Remember, that it is not your educational degrees which will make

you rich one day. It is the Asset column of your financial statement
which will make you rich one day. So focus on Growing the Asset
Column of your Financial Statement to become Rich & Financially
Free one day in your life.
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Myth: 2 Get a Job

Reality: Why to do a job when you can create jobs, Save more taxes
and use other peoples time to get rich quick?
One of the most stupid financial advise that the middle class people give
their children is Get a Safe & Secure Job, Work Hard and earn high
income.
In fact, the entire education system will give you just one option to make
money in your life and that is Get a Job. When I was in School, my
classmates who came from the middle class background were all the day
talking about getting a good high paying safe and secure job after finishing
their school and college education. This is because their middle class parents
had taught them that getting a high paying job is the most wise financial
decision one can take.
While Rich people know that one can not be rich and financially free by doing
a job only. And thats why they teach their kids to create jobs by starting
their own businesses rather than doing job at someone elses business to
make the owners of that business rich.
What is the Problem with Doing a Job?
The biggest problem with doing a job is that, You will pay the high taxes and
remain middle class and poor. You can never get rich by doing a job. This is
because it is the employees of any country who pay the highest amount of
tax.
And thats why some middle class people advise their kids to become a
doctor, lawyer or Chartered Accountant so that they can earn high income
and become financially free. But well, again the problem with being a selfemployee professionals is that, you will pay even higher taxes than the
employees.
Self-employees like doctors and lawyers pay the highest amount of tax. And
they form the major portion of the tax revenues of any government.
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Being a Doctor or a Lawyer is not a bad thing. After all, the economy needs
the quality medical and legal services. The only problem is with the mindset
of the people. Even if many people become doctors and lawyer, their
mindset is still that of the middle class people and thats why rather than
starting their own business and company of medical or legal services, they
prefer to do a job at some government hospital or at some multispeciality
hospital owned by a pharmaceutical company at higher pay scale.
And thats why these high skilled people earn lots of money but still end up
paying more in taxes and thus accumulate less in assets.
While Rich people have different mindsets and thats why even they take
professional qualifications like Medicine and Lawyers, they will still focus on
creating and acquiring assets in the asset column of their financial statement
to grow more rich.
On the other hand, Business owners and Investors are the people
who pay the least taxes to the governments legally because they use
the power of corporate structure to save more taxes. While people
having middle class mindset dont have any knowledge about the
Financial Statements, habit of thinking in financial statements and
focusing on growing the Asset column and many other things about
Money and Financial Education which are required to grow rich.
Some Business owners and Investors use the power of corporate structure
so much wisely that even after earning lots of money, they virtually pay no
taxes at all.
Thus, if you will chose to become an employee or self-employee, you will
end up paying higher taxes to the government and nothing else.
Rich know the fact that, the tax laws favour the Business owners and
Investors who by creating or investing in Businesses create new jobs in the
economy. And thats why rather than doing a job, they teach their kids to
own businesses and the power of the corporate structure to save more
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taxes, protect their assets and create new money in the economy legally by
taking their businesses to the public.
The Government provides the maximum tax benefits to the Business owners
and Investors and the least tax benefits to the employees and selfemployees.
Is there really something like a Job Security in the World?
NO. There is nothing like a job security in the 21st Century. The idea of
having a safe and secure job was an Industrial age idea. And this is
the information age.
The Idea of having a safe job used to work before 1990 means before
starting of the Information age. But today, depending on the job security is
the most stupid thing you can do.
This is because when you have a job, you have only one client and that is
your boss. But when you own a business, you have literally hundreds and
thousands of clients Your customers. So if one client (Customer) will fire
you, there wont be any problem. But if your boss fires you, you are in a big
trouble.
Job is for Financially Illiterate People
Without having financial education you will have to get a job. And this is the
reason why schools dont give you the financial education. This is because
then you will be automatically diverted towards getting a job even after
becoming a doctor or a lawyer.
What most of the Middle class people do is They go to School > Work
hard > Get good grades > Go to colleges > Get good graduation degrees
> Get a job and start earning money > After few years again go to some
other college for specialty degrees > Take another job which will pay higher
salary than the previous job > Work hard their through out life > Live
paycheck to paycheck > Struggle Financially And so on and on.
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The only focus of the middle class people is to increase their income by any
means. While Rich people focus on different thing The Asset column of
their Financial Statement.
What Rich people do is They go to School > Work hard to take vocational
education > Simultaneously take the financial education from their parents
or mentors > Learn the power of the corporate structure > Go to College
> Start developing their own Business (Asset) during their college time or
start running their family business > Take the Graduation degree from their
college or even drop out because they know that it is of no value > Hire
more employees and use their time to grow their own business > Take
their Business to the public because they have learned the power of the
corporate structure > Become multi-millionaires and even billionaires and
financially free > Now, there businesses are running even without their
presence > So weather they work or not, the money will still keep flowing
into their bank accounts > They focus on acquiring more assets and grow
the asset column of their financial statement.
Moral:
- Rich teach their children since their school time that doing a job is the
most stupid thing anyone can do in his life. Rather than that they teach their
kids to create businesses, save more taxes and create new jobs in the
economy.
- The job is the highest risk profession
- Learn the basic lessons on money and master them as early as possible in
your life means now so that you can become rich and financially free one
day in your life.
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Myth: 3 Work Hard to Earn More Money

Reality: Rich & Middle class both work hard. But the Middle class
work hard to increase their Income while rich work hard to increase
the Asset Column of their Financial Statement
This is one of the most common myth about money that middle class people
pass on generations to generations. And this is the reason why their
generations remain the middle class, work hard and live paycheck to
paycheck and still struggle financially.
So Whats problem in working hard for the money? After all Rich and Ultrarich people like Bill Gate, Mukesh Ambani, Lakshmi Mittal, Anil Ambani,
Michael Dell, Donald Trump and all the other billionaires also work hard.
Than why working hard for the money is a myth?
Diagram: 47 - School Teach Us to Work Hard for Money While to

Become Rich, We need to Work Hard for Assets
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Rich & Middle class both Work hard But Middle class work hard to
increase their income while Rich work hard to increase their Assets
Everybody in this world should work hard. And there is nothing wrong in it.
But the main difference between the rich and everyone else is that, The rich
work hard to create and acquire more assets in their asset column. The rich
work hard to grow their asset column of their own financial statement. While
Middle class work hard to earn more money and increase their income.
Diagram of the above
Whats the problem with working hard for income?
Well, there are two problems of working hard for the money.
01) The harder you work for your income, the more you will pay in taxes.
02) Working hard for money (And to increase your income) means you are
working for the Active income means you will have to keep working hard for
the rest of your life and if you stop working hard for the income or fired by
your company, your that income will suddenly disappear.
What is the advantage of working hard for the Assets?
There are two advantages of working hard for Assets.
01) The harder you work to create more assets in your asset column, the
less you will pay in taxes because you are working for creating assets
02) Working hard for Assets means you are working hard for the Passive
income. And thats why it is the one time hard work only. So once you do
this hard work, your job is over. After that weather you will work or not, that
passive income generated by your assets will keep flowing into your bank
accounts for the rest of your life and even after that.
Thus, rich and middle class both work hard. But there is a huge difference
between their hard work. Initially the hard work of rich and middle class
looks the same but in the long run, the hard work done by rich overtake the
hard work done by the middle class.
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Both Rich and middle class teach their kids since their school time to work
hard in their lives. But the Middle class teach their kids to work hard to
increase the income while rich teach their kids to work hard for the Assets.
They teach their kids to work hard for growing the asset column of their
financial statement by creating and acquiring more and more assets.
And this is the ultimate advantage of understanding the basics of financial
statement and words like Assets, Liabilities, Cashflow, Active & Passive
Income and the power of the Corporate Structure.
Second Job to increase Income The Foolest Ides
Many Middle class people start a second job to increase their income. This is
because now they are married and have children. They say proudly that, I
am scarifying my personal life for my children. They say proudly that, I am
doing it for the future of my Children.
Well, This is the most foolest thing that one can ever do. Rather than doing
a second job to increase your income, increase your financial education and
wok hard to grow the asset column of your financial statement. And also
impart the financial education to your children during their school time.
Moral:
If you want to become rich in your life than simply work hard for Assets.
Work very hard to grow the Asset column of your financial statement by
creating and acquiring more and more assets.
This is because Assets generate Passive income which flow into your bank
accounts even if you stop working one day, travel the world or die.
Working hard to increase your income is a Fools Plan.
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Myth: 4 Save Money

Reality: Saving Money will not make you Rich anymore if you are not
going to buy Assets out of your Saved Money So The Modern
Financial Advise is Save & Invest
Save Money is the age old Golden financial advise. And the people who
save money are really wise people. And it was saying that, those who save
at least 10% of their monthly income wont have any financial trouble in the
future.
Thus, Save Money is the golden financial advise. And after all, the old is
gold.
But well, unfortunately, After 1971, the gold (money) doesnt remain gold
anymore. The Gold become separated from the money. The Gold Standard
had been removed by President Nixon of USA in 1971 and followed by that,
all the world has followed the same rule.
Today Gold is different and Paper Money (Currency) is different. So What all
these have related to this golden financial advise Save Money?
Well, the problem is that, after 1971 the money stop being money and
became currency. The money became debt after 1971.
In laymans language, After 1971, the central banks and Governments from
all around the world can print as much money as they want according to the
need of economy. And thats why one new silent wealth killer came into this
world which was Inflation.
Because of the printing activity of the governments and central banks
around the world, the more money is printed and pushed into the circulation
which is now diluting the purchasing power of the existing money in the
circulation by causing hyperinflation.
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Diagram: 48 - Save Money Old Financial Advise. Save & Invest

Money Modern Financial Advise
So What all these have to do with our ancient financial advise Save
Money?
Well, After 1971,
SAVERS ARE LOSERS!!!
The Modern Financial Advise is Save & Invest.
This is because if you spend your entire life just to save money and not
investing it to acquire or create more assets, the purchasing power of your
saved money will be eroded by several folds because of the inflation.
Unfortunately, Money is not the Asset any more but money becomes
Liability after 1971.!!!!
Well, Yes. I know that this is really a breaking statement and hard to engulf
and believe. But this is the Truth Your Money is not the asset anymore
after 1971.
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This is because according to the definition of Asset, an Asset is something

which puts money into your pocket weather you work or not as well as
appreciate in its value over the period of time.
Now, after 1971, because of the inflation, your money doesnt appreciate in
its value over the period of time and provide you any income. And thats
why your Saved Money is your Biggest Liability. Because the value of
your saved money will go down markedly because of the inflation.
Rich know this fact about money since 1971. Rich know that the rules of
money have been changed in 1971 by President Nixon when he removed
The Gold Standard and remove the back up of money with gold.
While Middle class still dont know that the rules of money are changed. The
money is no longer a money anymore. But it is just a piece of paper without
any intrinsic value in it. The government can print as much money as it want
according to the need of the economy.
So What Rich Teach their Kids about Saving Money?
Well, Rich teach their kids to save money but also dont keep your saved
money with you. They teach their kids to create or acquire assets out of
their money to grow the asset column of their financial statement.
This is because the rich know that, Money can not make anyone Rich. It
is the Assets which can make anyone Rich.
And thats why you should not only save money but rather than Save &
Invest your money to buy more assets out of your money. Buy Stocks, Gold,
Bonds, Real Estate, Businesses, Mutual Funds, Art, Web properties, Rare
wines or any other type of asset from your saved money.
Dont just play the game of money like Middle class anymore. Saving money
was an effective financial advise once upon a time but not now.
The problem with School system is that, it will teach you only one thing
about Assets (Businesses & Investment) and that is Risky. And thats why
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the most of the people save good amount of money but they afraid of buying
more assets out of their money.
While Rich teach their children the basics of financial statements, ability to
think in the financial statements and the difference between various financial
words like Assets, Liabilities, Active-Passive Income and Cashflowetc..
Moral:
Save Lots of Money. Saving Money is really a good thing. But dont just keep
this money with you. Buy Assets out of your money. Create Businesses out
of your money. Invest your money in stocks, gold, bond, real estate, mutual
funds or any other Assets. Use your saved money to grow the asset column
of your financial statement if you want to become rich someday in your life.
Modern Financial Advise is Dont only Save Money But Save & Invest
Your Money.
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Myth: 5 My House is my Asset

Reality: Well, Your House is not your asset but it is your Biggest
Liability because it doesnt put money into your pocket weather you
work or not.
Diagram: 49 Your House is not your asset but the liability because it
doesnt put money into your pocket every month but takes money
out of your pocket by making expenses
This is the biggest Myth about Assets and money in the history of mankind.
Today most of the people in this world still believe that the house in which
they live is their biggest asset.
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But well, if you understand the financial statements and the cashflow pattern
of the money in the financial statements than you will find that your house
in which you are living is not your asset but it is your liability.
Basically the house in which you live is the Asset of your,
- Government &
- Your Mortgage Lender.
Diagram > Asset puts money as income and house keep money out of your
financial statement
Diagram > Governments and mortgage lenders financial statement your
house is their asset and not yours.
Just see the above two line diagrams. The above two line diagrams show
that every month your house takes money out of your financial statement by
making various kind of expenses. While for the governments and banks
(Mortgage lenders), your house makes passive income in their financial
statements as tax income and mortgage payment and interest income.
Thus, in reality, your house is the asset of your government and your
mortgage lender.
But the Government is giving Tax breaks Under Section 80C &
Section 24 (b) in India Many Financial advisors and tax planners will give you this advise. They will
tell you that buy a bigger home and take a bigger home loan because the
government is giving you the tax break.
Under Section 80c, You can save up to Rs.1 lakh of tax on the principal of
your house in India and Under Section 24(b) you can save up to Rs.1.5 lakhs
of tax on your interest payment on your housing loan every year in India.
In fact, many people take home loans only for this purpose only and tell
proudly to their friends that they are saving tax smartly.
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But well, these fool people really dont know that to save just MAXIMUM
Rs.2.5 lakh of annual tax, they are taking more than 20 lakhs of loan!!!!
It is true that, by using Section 80c and 24b, you can reduce your taxable
income by Rs.2.5 lakhs. So say for example if your taxable income is Rs. 4
lakhs than your taxable income will now be just Rs. 1.5 Lakhs.
So you will save a tax on Rs.2.5 lakhs of your Income.
Now, just think that how much tax you have to pay on your 2.5 lakhs of
Income in India at the rate of highest tax slab bracket and that is 30%?
Rs. 75,000.
So to save MAXIMUM Rs. 75,000 of tax annually, you are taking a
home loans of literally lakhs of rupees?!!!!!
And Is this what your Financial Advisor or the Tax Advisor or the Accountant
or a Banker told you?
Is this what you tell a smart tax planning?
To save just Rs. 75,000 of tax annually, you are going into a deep debt.
So dont give such kind of excuses anymore. And if someone tell you that he
is saving tax smartly by taking a home loan that tell that fool to read this
article.
But the House appreciates in its value and give you the Capital Gains
Many Middle class people, your bank, your government and even financial
advisors will argue this. They will tell you that your house is your biggest
asset by giving you the above reason.
In fact,
- Your Government will give you more tax breaks on buying a home by give
you home loan tax benefits
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- Your Banker will also tell you to take bigger mortgage loan to buy a bigger
house for you by telling you that, after all you are buying an Asset and thats
why it is the investment of your money.
In fact, most of the people in this world mainly in India still have a false
belief that,
Myth: The Price of Real Estate go in One Direction Only UP!!!
Reality: The Price of the Real Estate can go in any Direction Up or
Down. The price of any asset in this world can go in two directions
Up & Down.
Most of the Middle class people buy bigger home by fooling themselves that
after all they are buying an asset out of it. After all they are investing their
money in the real estate and on the top of that, the government is also
giving the tax break on home loans.
But well, This is The Biggest Trap by your government & banks. Basically
the Banks and the governments are fooling you. They are giving you the
false information. They are hiding the right information from you.
Just see the USA Housing Bubble burst in 2006. Before that the people in
the USA were also used to think that the price of real estate can go in only in
one direction and that is up. And thats why they used to buy homes worth
of $ 200,000. And today they have already paid up $ 150,000 in their home
equity and the price of their homes is just $ 50-80k. Because there is no
buyer in the economy which is ready to pay more than $ 200,000 for those
houses.
The same thing can happen in India or any other country also. And thats
why depending on the Capital gains of the real estate of your house and
thinking that its your asset is a bad idea.
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You are Emotionally Attached with your House Now, suppose think that the price of Real estate can go in only one direction
and that is up. Now, in that case also your house cant be your asset. This is
because suppose if you have bought an excellent house in good locality for
Rs. 1 crore and in 3 years its price will double to Rs.2 crores than will you
sell it?
Of course not. This is because you are now emotionally attached with your
house and thats why you are not going to sell your house. And suppose if
you sell your house than probably you wont be able to buy back it in the
future.
While if you have 1 crores of Shares of Reliance Industries which doubles in
its price to Rs.2 crores than you can sell it and again buy it when the market
goes down.
You can also do the same thing with gold or any other asset.
But you can not do the same thing with your House. Because you are
emotionally attached with your house.
So One Should not Buy a House for Life Time & Live in the Rental
Apartment/House Only?
Well, NO. Rich dont teach their children such kind of moral killing things. In
fact, Rich motivate their kids to buy luxurious houses and enjoy their lives.
So here the Rich advise is not that You should never live in your own
house because its a liability.
The logic of understanding this difference is that,
You should not give the first priority to buy a home. Just think in your
financial statement and think that What Advise I had given you in the
lessons on money & Financial Education?
Well, I told you that if you want to become rich in your life than focus only
on thing Asset Column of your Financial Statement.
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So first of all build the Asset column of your financial statement. Work hard
to build the asset column of your financial statement to such a level that
from that level it can throw sufficient passive income by which you can
afford all of your monthly home loan (mortgage) payments.
Rich afford their luxurious houses like this. So that they dont need to work
hard to pay those monthly mortgage payments. This is because their
mortgage payments are afforded by the passive income from their Asset
column of their financial statement.
What Most of the Middle class will do is,
Take a Job > Work Hard > Earn High income > Take a Big Home loan
and buy a big house > Work more and more hard for 15-20 years to pay
the monthly loan payments of their home > Ultimately they fail to build
some serious wealth because all of their hard earned money goes to pay
those home loan payments > Remain middle class or poor.
Rich play the game of money like this,
Have Basic Financial Knowledge > Start Focusing on building their own
Asset Column First > Create Businesses & Do Investments > Grow the
Asset column large > The Asset column will start generating passive
income > Put a Down payment > The Passive income from their asset
column will afford the monthly mortgage payments of their house > After
that weather the rich work or not he will be still able to pay his mortgage
payments. This is because his Assets are affording his Liability (House).
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Diagram: 50 - Your Rental Property is Your Asset because it puts

money into your pocket.
Well, The house in which you live is your liability. But if you own a rental
property which gives you positive cashflow after deducting all the expenses
like tax and mortgage payments than its your asset.
This is because your rental property can put money into your pocket weather
you work or not.
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Moral:
Your House is not your asset but its your biggest liability. This is because
every month your house takes money out of your financial statement.
Middle class buy a house from the first day of their career or during their
early career years and after that struggle hard to pay the mortgage
payments of their house. Now, this money would have gone to build the
asset column and becoming rich and financially free.
Rich first of all work hard to grow their asset column first. And once their
asset column starts throwing sufficient passive income, they buy a house
and pay their monthly mortgage payments from the passive income from
their asset column.
Thus, Rich and Middle class both love to buy expensive houses and both of
them buy a dream house for them also. But Rich remains rich even after
buying a luxurious house while a middle class remain middle class or even
become poor after buying a luxurious house.
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Myth: 6 Get Out of Debt

Reality: Get Out of Bad Debt only But take more and more Good Debt
Whenever you read some personal finance book or a blog, they will teach
you and motivate you to get out of debt. They will tell you that get out of
debt and never take any kind of debt if you want to become financially free.
They will also teach you that how you can get out of debt by cutting down
your credit cards, earning more income and many other things. Well, at a
first look this sounds really a cool financial advise. But unfortunately, setting
such kind of mindset really affects your growth.
This is because this financial advise is for a bad debt only. While in the real
life, the two kinds of debt exists Good Debt and a Bad Debt.
Diagram: 51 Good Versus Bad Debt

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A Good Debt is one which puts money in to your pocket. A Good Debt is
one which is used to acquire the assets and when you pay this debt, you
become the full owner of some kind of Asset.
Say for Example, the debt that you take to grow your business is a good
debt. This is because it is used to grow your asset Your Business. A Debt
that is taken to buy a rental property is a good debt because after paying
this debt, you will become the owner of that rental property which will
generate endless cashflow for you.
A Bad Debt is one which take money out of your financial statement and
makes you poor. A Bad debt is one which is used to acquire liabilities and
when you pay this debt, you will become the owner of the liability which will
not only depreciate in its value markedly but also will make you expenses.
Say For Example, The Car loan is a bad debt. This is because after paying
your entire car loan, you will become the owner of something which will lose
its value. A newly bought car will lose almost 60% of its value within first 4
years. Credit card debt used to do shopping and buy products which are
depreciating is a bad debt.
Should You Cut Down Your Credit Cards?
- Of course yes. If you are financially illiterate.
- Of course No. If you are financially educated.
A Credit card can be your good as well as bad debt. So if you dont
understand the difference between the good and bad debt and if you dont
have any kind of knowledge of financial statements and habit of thinking in
financial statements and the difference between the words like assets and
liabilities than it is better to cut down all of your credit cards and stay away
from it.
This is because the credit card is the highest interest debt which can make
you even Bankrupt.
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Thus, cutting down credit cards is the financial advise for the Middle
class people.
While Rich people dont need to cut down their credit cards. Not because
they are rich and have good bank balance. But because they have the clear
understanding of good versus bad debt. Rich use their credit cards to take a
good debt and become more richer than ever. This is because rich always
buy Assets out of their credit cards.
Rich always use their credit cards to acquire assets like Domain names, web
properties, Business debt, payments to buy assetsetc.. And thats why they
grow richer when they pay off their credit card outstanding.
While middle class use their credit cards to buy liabilities which depreciate
faster and lose their most of the value within first few years of buying.
Thus, if you are going to use the credit card debt to acquire assets than
have a credit card. No problem in it. In fact, the entire money supply of the
world is debt today. This is because in the 1971, President Nixon of America
removed the gold standard and dollar became debt followed by all the
currencies of the world became debt.
So whenever our government take a debt from public by issuing bonds, the
new money is created in the economy. Whenever you scratch your credit
card to buy things worth of Rs.1000, the new 1000 rupees are created in the
economy at that time and when you pay that 1000 rupees back to your
bank, that money disappears from the economy.
So whenever you, me, businesses or the government borrows money, the
new money is created in the economy and whenever we pay that debt, that
newly created money disappears.
Thus, when you take a car loan of Rs. 5 lakhs, this 5 lakhs are newly created
in the economy. And when you pay back this loan, this money disappears.
This is known as Fractional Reserve Banking. In short, the entire world
grows like this only.
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Rich know this fact about the money and thats why they use the debt to
acquire more assets and grow richer. Rich use debt to expand their
businesses, buy profitable rental properties or acquire any other kind of
assets and thus become richer and richer.
While middle class people take huge loans to buy cars, travelling abroad,
shopping and to acquire several other kind of liabilities and become poorer
or remain middle class only. And thats why following financial advises about
debt are for middle class only.
- Get out of Debt
- Cut down all of your credit cards
- Stay away from Debt
- Never Take Debt
The above are the financial advises for the middle class people only. Rich
cant follow the above advises. This is because if they will also start following
the above advises than how they will become richer? Basically rich use debt
to get more richer.
How Rich Use Debt to get Richer?
Well, Rich use debt to get more and more richer. Say for Example, the rich
puts Rs.1 Crore as a down payment to acquire the Rental Property (Asset) of
Rs. 5 Crore (20% Down payment).
Thus, he takes a loan of Rs.4 Crore to acquire the asset. This is known as
leverage. So he acquires the asset worth of 5 crores by putting just 1 crore
down. Now the rental income from that real estate will pay off all of that
mortgage loan. So rich dont have to pay the mortgage loan payments from
his own pocket or from his hard earned income.
So after 10 or 15 years, the rich will have the Asset which will be worth
more than 5 crores. This is because during such a long time horizon, the
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price of real estate will also appreciate making him richer. Also the rentals
will increase improving his cashflow.
On conservative side, within 15 years the price of that property will at least
doubled if not tripled. So after 15 years he will have an asset worth of Rs.10
Crores minimum. And all of this is from the investment of just Rs.1 Crore.
Ok. Now, let us talk about Middle class people. The Financial advisors advise
middle class people to not to take a debt and rather than that invest money
in the mutual funds via SIP.
Now, just tell me that how much money you will have to invest today in
Mutual Funds to grow it to 10 crores after 15 years? Let us assume that
Indian Equity will give you 20% Compounded annual return.
Around 85 Lakhs. So suppose if you today invest 85 lakhs in mutual funds
than after 15 years it will become 10 crores.Well, this is really cool. But do
you know that how much money you will need to earn to save Rs.85 lakhs?
Almost double. This is because you will have to pay almost 40% tax on your
hard earned income. Thus, growing rich without taking a good debt is almost
impossible.
While if you have use Rs. 1 crore to take 4 crores of debt than you will not
only able to acquire the asset of 5 crores but you will also have tax benefits
of 5 crores for investing just Rs. 1 crore.
Rich people take lots of good debt to expand and grow their businesses. This
is because business is an asset which pays off all of their debt.
Moral:
Learn to use good debt. Increase your Financial IQ and understand the
difference between good and bad debt. Always take a good debt to grow
richer and stay away from the bad debt.
A Good debt will make you richer while a bad debt will make you poorer.
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Myth: 7 Live Below Your Means

Live Below Your Means is the most moral killing and psychologically
disturbing personal finance advise that various personal finance authors
and bloggers give people.
In fact, many personal finance gurus say proudly that they are living below
their means and thats why they are financially free. And people should also
live below their means to become rich and financially free.
Well, than what is the meaning of being rich if ultimately you are going to
live below your means? Its like,
Live Poor but Die Rich!!!
In fact, nobody wants to live poor and die rich. Such kind of financial advises
look really good when you advise someone to live below his/her means. But
when it comes to you, its really a moral killing financial advise.
Well, it is true that most of the people in this world have to live below their
means because they are deep in debt and their income is very low.
The logic behind the advise - Live Below your means is that, by living below
your means you are decreasing your expenses and thus improves your
cashflow (Income Expense). Now, this is really a good thing. Increasing
your Cashflow by reducing your expenses is really a good idea.
In fact, Fortune 500 companies also cut down their un necessary expenses
to increase their Cashflow. But unfortunately, most of the people dont know
that what to do with this Additional Cashflow?
Remember that, Live Below your means will only work for you if you
are going to divert your increased cashflow to buy more assets and
grow your asset column.
Most of the people blindly follow the advise of the financial planners and live
below their means. This really improves their cashflow. But this doesnt help
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them to get rich and financially free. Because they dont acquire assets out
of their improved cashflow.
In fact, they dont have any knowledge about the words like Cashflow,
Assets, Liabilities and Financial Statements and thats why even after living
below their means they dont become rich in their financial statements
because they dont acquire any assets.
What You should do if you dont want to Live Below Your Means?
Rich, Middle class or poor, nobody wants to live below their means. And
thats why both middle class and rich buy more liabilities, luxurious items
and status symbols from their money.
This is because its a human nature. We love to drive expensive cars, wear
expensive watches and travel the world. Rich, Middle class or poor all of us
love to enjoy great lifestyle. But well, the rich and middle class play the
game of money differently to afford their lifestyles. Here is how.
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Diagram: 52 - No need to Live Below Your Means. Increase Your

Asset Column and afford every luxury from the Income generated by
your Assets
Middle class Person > Loves to live a lavish lifestyle > Study Hard >
Get good degrees > Get Good High Paying Job > Earn more > Afford
Luxurious lifestyle from Hard Earned Income > Wants to upgrade lifestyle
> Work more hard > Get a Second Job > Improves Income >
Upgradation of lifestyle > Finished > Now he can not upgrade more from
this level because one day has only 24 hours and he can not work more than
18 hours a day > Not only this but to maintain current lifestyle he has to
work hard 15 hours a day > He cant stop working because if he stops
working, he wont afford his luxurious lifestyle
Rich Person > Loves to live a lavish lifestyle > Study hard > Parents
have given financial education > Dont do job but start focusing on growing
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the Asset column of his financial statement > Start a Business as

developing a Business is all about creating new assets > Work hard to
create and acquire assets > Generate Passive income from his asset
column > Affords luxurious lifestyle from his passive income > Wants to
upgrade lifestyle > Buy More Assets > Passive Income will improve >
Upgrades lifestyle > Again wants to improve lifestyle > Again buy more
assets and generate more passive income > Upgrades lifestyle > And so
on and on > One day he stops working > Still he and his children will be
able to afford the same level of lifestyle without working hard because their
assets afford their lifestyle and not the hard earned income.
Moral:
Thus, the rich dont have to live below their means. This is because they
know that they need to acquire more and more assets to expand their
means.
If the rich want to upgrade their lifestyle, they will acquire assets first and
generate passive income from their assets and after that buy liabilities from
that passive income. In other words, for rich, their assets afford all of their
liabilities.
Middle class people buy liabilities from their hard earned money and thats
why they need to keep working hard to afford those liabilities and lifestyle
And if they stop working, they will have to compromise with their lifestyle
and live below their means.
So if you want to live like rich than spend your time and energy to create
and acquire more and more assets in your life. Grow the asset column of
your financial statement such a large that the passive income generated by
it can afford all of your expenses and liabilities.
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Myth: 8 Invest for the Long Term and Diversify

Reality:When you Invest for long term in Paper assets, you are
investing for the Capital Gains which is very risky. Diversification is
for those financially uneducated investors who dont know what they
are doing
One of the most common financial advise is, Invest in Mutual Funds,
Diversify your investments and Invest for Long term.
This is like a Buy, Hold & Pray Advise.
Problem with Investing for Capital Gains The only problem with the paper assets like stocks, bonds and mutual funds
is that, you only have control over one thing and thats when you sell. You
dont have any other control than this. This is known as investing for the
capital gains. Means depending on the price of that asset going up. Here you
dont have any other kind of control over that asset.
Say for Example, if you buy a stock of Reliance Industries, What you are
investing is investing for the capital gains. You dont have any kind of
management or cashflow control over the Reliance Industries. And this is
very risky. And this is like a gambling. It is because to make profits from the
Reliance Industries or any other stock, you will have only one option and
that is wait for the long time to increase the valuations of the stocks of that
company (Capital Gains). And this is what I call investing for the Capital
Gains.
Now, let us discuss about the Mukesh Ambani and other directors of the
Reliance Industries who are also the shareholders of Reliance Industries just
like you and me. Their main advantage is that, they have more control over
the business than you and me say for example control over the management
team, control over the assets of the companies, control over the cashflow
and profits and several other controls. So the owners of that business can
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take out any amount of money from the company whenever they want
because they have more control over Reliance Industries than you and me.
This is true for any paper asset. This is true for any stock. When you buy a
stock from the stock market, the only control you have is on the selling. And
the only profit you can make is the capital gains. And thats why this form of
investing is very dangerous.
Today most of the employees and self-employees are investing for the
capital gains and thats why they have stay invested for the long run.
This is the Middle class investment strategy. While Rich teach their kids to
promote their own companies and do the business from their company, take
their company to the public and sell the shares of their own companies to
literally millions of people.
Thus, Stock investing is a really profitable game if you are on selling side. So
promote your own companies, do a business from your company, have a
better control on your asset and sell the shares of your company to people.
This is what the rich teach their kids about the stock investing.
Problem with Investing in Mutual Funds The financial advise Invest in mutual funds for long term and diversify is
also a financial advise for the middle class people. Here also you invest for
the capital gains only. Means the only control you will have on your
investment will be Sell.
Mutual Funds do nothing but divert all of your money towards the financial
markets.
While Rich teach their kids to Invest for Both the Cashflow & Capital
Gains.
The problem with investing in mutual funds that, you put your money and
take 100% of the risk and the fund house makes money by charging various
expenses from you. So weather you make money or not from your
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investments in the mutual funds, your fund house will definitely make
money weather you win or lose.
Today when I see the various Personal Finance bloggers around the world,
many of them are earning lots of money from their Authority Blogs. They are
running their own successful blog businesses. But basically they invest like
middle class. Means they invest all of the profit of their blog business to buy
mutual funds.
While I personally dont like to invest for the Capital Gains. So I keep reinvesting the profit of this blog to hire more writers and create more unique
and quality content for this blog. This also improves the Cashflow.
Why should I invest in mutual funds and stocks for capital gains when I have
a full control over my Blog Business My Own Asset? This is because the
more I invest in my own asset (This Blog), the more cashflow it will generate
and thus more richer I will get.
Of course, if your business is large enough and you dont want to grow it
anymore than definitely go for investing in the mutual funds and assets for
capital gains only.
Problem with Diversifying your Money This is another most widely distributed financial advise. The advise is,
Diversify your money. Well, If Bill Gates had diversified his money than
today you and me would not be using Windows.
The point is that, Diversifying your money is really an effective
financial advise for the Middle class people only.
If somebody is a middle class and financially not educated much than
Diversification is really a good financial advise for him. This is because
according to Warren Buffet,
Wide Diversification is only required when the Investor Doesnt Understand
what He/She is Doing
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But if you know that what you are doing than Diversification is not the
financial advise for you.
The Basic Difference Between the Rich & Middle Class Investing The basic difference between the Rich & Middle class investing is, The Rich
Invest for the Cashflow (& Capital Gains both) While the Middle class Invest
only for the Capital Gains (Buy, Hold & Pray).
Investing for Capital Gains is a form of gambling. This is because here you
will have to depend on the price of the asset going up. When you invest for
the Capital gains, you dont have any control over your asset except selling
it.
While Rich Invest for Cashflow means they invest in their own businesses to
generate Cashflow or invest in rental properties or any other asset on which
they have a more control can can generate passive income from it.
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Myth: 9 Retire With Pension Plans

Reality: You can not retire with the modern pension plans (Defined
Contribution Plans). You will have to build your own retirement
corpus by your own
One of the commonest Myth about money is, Invest in Pension plans for
years and get retire on them. Well, This was the financial advise which was
really effective before 1974. But after 1974, you can not retire on the
pension plans anymore.
What Happened in 1974 with our Pension Plans?
Well, in 1974, The US Government has changed Defined Benefit Pension
plans into Defined Contribution Pension Plans.
And after that the entire world has also changed this rule. So now most of
the countries of this world have defined contribution Pension Plans.
This small change in the rule has changed the pension plans and the entire
concept of the pension. Defined Benefit Pension plans means you work
whole of your life for the government or a company and for your entire life
hard work, you will get a definite paycheck for the rest of your life. So
Defined Benefit Pension plans were the real pension plans.
But Define Contribution Pension plans means what you will get after your
retirement is, all what you put in the pension plans for your entire working
life.
This means that, to become retire and financially free, you will have to pay
some amount of money every month or a year in the pension plans for 10,
15 or 25 years. These pension plans divert your this money towards the
stock market and make capital gains and build the retirement corpus for
you. And after your retirement, you will get your own invested money and
nothing more than that.
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So What is the problem with Defined Contribution Pension Plans?

Well, The main problem with the Defined Contribution pension plans is, they
divert your money towards the stock market to generate capital gains for
you. Now, This is really risky for the people. This is because the main object
of the defined benefit pension plans was to provide safety and security after
the retirement.
And thats why these pension plans should be risk free. But now, the
problem is that these pension plans are no longer the defined benefit
pension plans but they are now the defined contribution pension plans. So
they diver your money towards the stock markets to generate high returns.
The problem with such kind of investing is that, what if during the time of
your retirement, the stock market crashes?
Well, This is not just the prediction or fear. But this really has happened in
USA in 2008. Because of the US Recession and market crash in 2008,
literally trillions of dollars of wealth of pension plans have been shrink and
thats why today the baby boomer generation is in trouble.
The
baby
boomer
generation
had
dream
about
financially
peaceful
retirement but now many baby boomers are saying that is the market wont
recover in few years than they will have to keep working for the rest of their
lives to meet the ends.
So The Modern pension plans are nothing but the machines to divert the
money of large number of small investors to the stock markets.
Today, No Investment is a SAFE Investment in this world. Even if
you plan to stay away from the stock market, virtually all the
financial products have equity component in it. So virtually all the
financial products will divert your money towards the stock market
which is really a risky thing.
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Thus, this is a time to become financially literate. The Rich teach their kids
the basics of financial statements and the meaning of the words, Assets,
Liabilities, Cashflow and active-passive income. They teach their kids the
importance of growing their Asset column of the financial statement so that
they dont have to depend on anyone after their retirement.
Moral:
This is the time to become financially literate and start doing your own
investments by yourself. Learn the basic financial education and develop the
skill of investing your money.
Rather than depending on the pension plans and mutual funds to build your
retirement, it is better to develop your own businesses and cashflow assets
on which you have full control. So even after your retirement, you will still
continue making money from your businesses and cashflow assets.
The key of successful retirement is, you start building your own
cashflow assets portfolio (Businesses, Rental Properties, Intellectual
Properties, Web Propertiesetc..).
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Myth: 10 Capital Gains Versus Cashflow

Reality: Middle class invest for the Capital Gains While the Rich
invest for Cashflow and Capital Gains Both
There are basically two forms of Investing.
01) Investing for Capital Gains
02) Investing for Cashflow (& Capital Gains Both)
Unfortunately, most of the people in this world know only one form of
Investing and that is Investing for Capital gains. In fact, all the financial
products available in the market (Mutual funds, Stocks, Pension plans,
ULIPs, Child future plans, Retirement plansetc..) are the Capital Gains
products only.
Diagram: 44 - Difference Between Rich & Middle Class Investing
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Remember that,
Middle class invest for the Capital Gains while the Rich Invest for
Cashflow and Capital gains both.
First of all let us understand what it means by investing for capital gains and
cashflow and then we will discuss why rich invest for cashflow rather than
only for capital gains?
What is Investing for Capital Gains?
Well, in very simple language, investing for capital gains means investing for
the price of asset going up. This means that you are investing in some asset
hoping that the price of that asset will go up in the future.
Say for Example, Investing in Stocks, Gold, Mutual Funds, Pension plans,
ULIPs, retirement plansetc..
Almost all the paper assets are the investing for the capital gains. And all the
employees and self-employees of the world invest mainly in the paper assets
for the capital gains.
Say for Example, you invest in stocks at lower price or when the market is
down and stay invested in it for a long time horizon hoping that the price of
the stock will go up and when you will sell it in the future, you will have a
huge capital gains.
In fact, today most of the people in our world invest for the capital gains
only and this is really a risky thing. Its basically a kind of gambling.
What is Investing for Cashflow?
Investing for the Cashflow means you are buying some assets not because
you think that the price of that asset will go up. But you are buying that
asset because of its cashflow. Here basically you are buying a passive
income stream. So once you will acquire that asset, your passive income and
cashflow will improve ultimately.
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This is a smart form of investing and rich invest for cashflow and capital
gains both.
Say for Example Rental Properties. You buy a rental property which will
not only give you the regular rental income but also appreciate in its price
(Capital gains).
Another Example is Business. When you invest your money to start your
own business or acquire the already established business, you are investing
for the cashflow. This is because you dont have to worry about the
valuations of your business. This is because as long as you will own your
business, it will give you steady cashflow which can afford your lifestyle as
well as other assets also.
Why Investing for Capital Gains is Risky?
So What is the problem with investing for the capital gains? Well, the only
problem with investing for the capital gains is that, you will have only once
control over your asset and that is, Selling.
You can not do nothing more than selling of your assets to realize the profit
when you are investing for the capital gains only. You dont have any other
kind of control over that asset.
Say for Example, when you buy shares of Reliance Industries (RIL), you are
basically investing for the capital gains means you are hoping that the
fundamentals of the company are strong so the price of this stock should go
up in the future and thats why you put a bet on this stock. You risk your
money on the stock.
But What is the price of the stock you buy will go down in the future? Well,
in that case you will end up losing your money no matter how valuable and
profitable Reliance Industries is. Rich avoid this form of investing. Basically
rich always invest for the cashflow and capital gains both.
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Believe me, Investing for the capital gains is really risky and some day you
will lose all of your wealth in such kind of investing and become financially
poor in the single shot.
Gold is the Investing for Capital Gains Risky Investment
Today many people around the world (Mainly in India) are diverted towards
investing in the gold. This is because since 2003, the price of the gold has
been appreciated very well.
And thats why many people are liquidating their other investments to only
invest in gold. Now, this is really an extreme form of investing. This is
because when you invest in gold, you are basically invest for the capital
gains. All the people are investing in gold because they hope that the gold
price can go only in the one direction and that is up.
But well, this is not the truth. The truth is that, the price of any asset can go
in any direction Up & Down. But unfortunately, middle class people think
that the price of the asset can go only up. And this is the reason why most
of the middle class people in India invest in gold hoping that all of them will
become very rich one day when the gold price will doubled, tripled or
quadrupled.
Unfortunately, Gold is not the investment for cashflow. It doesnt provide
you any cashflow. And thats why Gold is not the preferred asset class of the
rich people. Today, all the rich people invest mainly in 2 assets.
01) Business
02) Real Estate
Almost 99.99% of Worlds rich people own some kind of Business on which
they have a management control. Business continues to be the preferred
asset class of the rich. This is because your business can provide you a
cashflow on which you can live. The Gold of course can provide you capital
gains but never give you a cashflow. And thats why this form of investing is
really risky.
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If you already have one or more cashflow assets like Businesses, Intellectual
properties and Real Estate (Rental properties) than it is alright if you buy
gold from the passive income of your cashflow assets.
But buying a gold (Non Cashflow producing, Capital Gain Asset) from your
hard earned money than its surely a fools plan.
Why Rich Invest for Cashflow? - Advantages of Investing for
Cashflow Rich always invest for the Cashflow. They always analyze that how much
cashflow particular asset will generate for them once they will acquire that
asset. This is really a smart financial move.
This is because when you invest for the cashflow, you dont have to worry
about the daily ups and downs of the price/valuation of that asset. This is
because even if the price of that asset will go down, you will still have
cashflow income from that asset (Passive Income) which you can enjoy or
use to acquire more assets.
Say for Example, Rental Properties. Once you acquire the rental property,
you wont have to worry about the price of that rental property. Even if the
price of the real estate crashes because of the real estate bubble burst, you
will still have a passive income from your real estate.
When you own some business, you have several controls over your business
such as,
01) Control over the management team
02) Control over the Cashflow
03) Control over the Income
04) Control over the Expenses
05) Control over the Assets
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Thus, even if the price of your business goes down, you will still make
money from other controls. Say for example, Mukesh Ambani, the Chairman
of Reliance Industries (RIL) will still make money from RIL even if the stock
price of the RIL goes down by 50%. This is because he has a control over
management team, cashflow, income, expenses and the assets of the
company.
But suppose, if you buy the stocks of Reliance Industries and the price of the
stock will go down by 50% than you will simply lose 50% of your wealth and
nothing else. This is because you have invested for the capital gains which is
nothing but a form of gambling.
Flippers are Losers Flipping means buying low and selling high. And a flipper is a person who
flips assets for making profit. There are basically 3 common types of flippers
in the world.
01) Real Estate Flippers
02) Stock Flippers
03) Website & Domain Flippers
Real Estate flipper buy a real estate property at low price, modify and fix it
and later on sell it to a new buyer for huge profits after holding it for 6
months to a year.
Stock flippers buy stocks at low price and sell at higher price.
Website flippers develop a website out of scratch or acquire the already
established website, work hard on it to grow a web traffic and revenue of
that website and later on sell it to a new buyer for a huge profit.
Initially these kind of money making opportunities look cool. But these are
very risky things. This is because here you are investing your money for the
capital gains. And thats why one day you will lose your entire wealth in
flipping.
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Of course, rich never afraid of taking calculated risks. But taking such kind of
risk is literally an insanity. Playing with capital gains is a gambling. And the
thing is that, flippers call themselves a business owner but in reality flipping
is not a business but its your profession. This is because here you dont
accumulate assets and grow your asset column. But here you just trade
assets to generate income. And thats why the day you will stop doing
flipping, you will stop making money.
While rich are those who acquire cashflow assets. Rich accumulate assets.
Basically they dont just sell their assets when the price of their assets goes
up. And this is the main difference between the rich and the flippers.
Moral:
Rich want more control over their investments. And thats why they invest
for Cashflow. This is because if you have a control over the cashflow of any
asset, you will feel more secure and comfortable with your that investment.
The reason why middle class people dont feel secure and comfortable with
their investments is because they only invest for the capital gains.
If you only invest for the capital gains, one day you will lose all of your
money. So Think like rich and always invest for the Cashflow and Capital
Gains both.
asav4u@gmail.com
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My Journey To Billionaire Club

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MyJourneyToBillionaireClub.

WHAT RICH & ULTR-RICH (BILLIONAIRES) TEACH THEIR KIDS

Do You want to become Rich (Millionaire, Multi-Millionaire) or Ultra-Rich

Lesson: 2 Asset Versus Liability

: 2.1 Asset Classes..

: 2.2 Business Mindset..

Lesson: 3 Active Versus Passive Income

Lesson: 4 Good Versus Bad Expenses & Debt.

Lesson: 5 Cashflow pattern of Rich, Middle class & Poor

Lesson: 6 The Power of Corporate Structure

C) Create NEW Wealth in the Economy

The History of Money, Gold Standard & Modern Banking 103

Myth: 3 Work Hard to Earn More Money..

Myth: 4 Save Money

Myth: 5 My House is my Asset

Myth: 6 Get Out of Debt

Myth: 7 Live Below Your Means

Myth: 8 Invest for the Long Term and Diversify

Myth: 9 Retire With Pension Plans

Myth: 10 Capital Gains Versus Cashflow

Myth: 2 Get a Job

Lesson: 1 Financial Statement Basics

Lesson: 2 Assets Versus Liabilities

Diagram 1: Financial Statement Showing Assets and Liabilities.

Diagram 3: Financial Statement of the Middle class Middle class

Diagram 4: Financial Statement of the Rich. Rich focus on growing

Diagram: 5: Ultra-rich (Billionaires) Create New Assets in their Asset

nothing such as writing a novel, writing a book, recording a music, making

Diagram: 6: Biggest Offpaper Assets and Liabilities

Lesson: 2.1 Asset Classes

Diagram: 42 - Financial Statement Showing 4 Basic Asset Classes

Diagram: 43 - Middle Class work hard for Money (Active Income)

the passive income

their other cashflow

Diagram: 44 - Difference between Middle class and Rich Investing

So if you want to become rich than it is advisable to start a Business or real

Lesson: 2.2 Business Mindset

Diagram: 45 - School imparts different sets of keywords (Middle

taking any key decision, the

- Dont think about money during your school timeetc..

Lesson: 3 Active Versus Passive Income

Diagram: 7 Active Versus Passive Income

Diagram: 8 Middle Class Work Hard for Active Income

Diagram: 9 Rich Work Hard for Passive Income

Diagram: 10 Ultra-Rich (Billionaires) Work Hard to create Assets

Diagram: 11 Middle Class Afford Liabilities from Active Income

Diagram: 12 Rich Afford Liabilities from Passive Income

Diagram: 13 Middle Class afford everything from Hard Earned money

Lesson: 4 Good Versus Bad Expenses and Debt

Diagram: 14 Good Versus Bad Expense / Debt

Diagram: 15 Good Debt

Diagram: 16 Bad Debt

Lesson: 5 Cashflow Pattern of Rich, Middle Class and Poor

Diagram: 17 Cashflow Pattern of Asset

Diagram: 18 Cashflow Pattern of Liability

Diagram: 19 Cashflow Pattern of Poor

Diagram: 20 Cashflow Pattern of Middle Class

Diagram: 21 Cashflow Pattern of Rich