In I Don’t Want to Retire Old and Broke I said how I decided to follow Rich Dad’s philosophies on real estate to escape the rat race and become financially free.
The very first step is to get financially educated. Put down that glossy magazine; throw out that new boat catalog and learn to read financial statements. To be successful in life you need to know how to look after your money.
We actually went as far as employing a successful property investor (who had the same approach as Rich Dad) to mentor us for a while. He helped us find our first rental properties in Auckland. It’s imperative that you start right if you want to build a successful property portfolio.
We also bought the game “CashFlow 101” , an educational board game which Robert Kiyosaki built to help teach the concepts of passive income and financial freedom, to get you out of the ‘rat race’ forever.
The game takes a bit of figuring out in the beginning. Make sure you have a calculator! As you progress you learn about income statements and how to fill in a balance sheet, and the difference between assets and liabilities.
Firstly, you get given an occupation. You may draw an airline pilot, a nurse or a janitor etc (a tip here..the higher paid occupations have high expenses too and aren’t necessarily the best job to have cash flow wise). The game pieces are coloured rats; you throw the dice and the rats go around the circle (rat race), picking up opportunity cards (much like monopoly…which was Robert’s favourite game!) until you make it onto the fast track, where money is plentiful and life is easy!
The ‘opportunity cards’ are frought with peril…getting downsized, having children, the compulsary buying of doodads (a boat, an expensive car, the latest i-phone) can suck up all your income However, there is the chance to make a lot of money on property, shares and business!
This game can take hours to play and until you learn its lessons, it can even take days! However, once my husband made it out of the rat race and onto the fast track in the first ten minutes! (I recall he did this by having very low expenses and drawing a card which allowed him to buy some cheap shares. The next card allowed him to sell them for a huge profit so he could purchase a high cash flow business which, in turn, gave him a large passive income that covered his outgoings. Financial freedom)!
Playing this game regularly changed our spending and investment habits for life. It’s an entertaining way to learn about finance and turns a ‘dry’ subject into a motivating and fun experience.
Make sure you heed the warning on the box as, in real life, you must deal with sharks as well (tell me about it)! It says:
“Some people have gotten so excited playing this game that they have gone out and made foolish decisions. This game teaches the foundations of wealth. We recommend further education as well as always seeking competent advice before making any financial decisions.”
You have been warned!