Tuesday, June 24, 2008

I won Cash Flow 101

Today me and DH played Cashflow 101 which is game developed by Robert Kiyosaki of Rich Dad Poor Dad fame. The game is very simple and teaches one all about balance sheets, assets, liabilities, real estate, stocks, expenses and so many other things. The goal of the game is to get out of the rat race. The rat is race is a circle on the board that players keep going around and around until their passive income exceeds their expenses. How does that happen? Well my friends its very simple

You get your passive income to succeed you expenses by decreasing your expenses( liabilities) and increasing your income through investing in real estate and businesses. The equation is quite simple really. Lower your expenses+ Increase your income= Financial Freedom

Back to the Game...
In the beginning you pick an occupation ( Doctor, Lawyer, Teacher, Janitor, Engineer, Nurse, etc) and you have to balance the the assets and liabilities using a balance sheet. This time I was an Engineer and after taxes and liabilities I brought home roughly 1600 a month. How did I get out of the rat race this time... well let me tell you.
I began by reducing my debt by paying off my credit card debt and retail debt. Then I was able to buy 3 3 bedroom 2 bath homes with very low downpayments and below their market value. I sold 2 and after paying off my mortgages, I paid off my student loans and car loans. I then invested my money and bought and 8 plex, 1 duplex and 1 business. These investments caused my passive cash flow to be more than my expenses... so I was then out the rat race.
Once you get out the rat race you go around the fast track. Your goal on the fast track is to gain $50,000 a month cash flow or land on and pay for your dream. You get cash flow by investing (buying) businesses that give you at least $5000 cash flow. I won because I landed on my dream of being a mayor which cost me $125000. I had the money, paid for it, and well ladies and gents it was a wrap.
As for DH.... well he wasn't even close to being out the rat race.. LOL

1 comment:

oldwhiteandpoor said...

In this game, how does a janitor get out of the rat race?

I take home less than $800 and I can't reduce my expenses or save a dime.