Personal Note: Here in this article, Fairus, from his personal experience, takes us through the “enlightening world” of the Rich Dad Cashflow 101 game. I always wonder how I’m yet to play this great game. Testimonies about how the game (including other Robert Kiyosaki’s and Rich Dad’s materials) has changed lives, in terms of personal finance, are almost innumerable. I believe it’s a board game that’s very necessary in every home.
By [http://ezinearticles.com/?expert=Fairus_Farok]Fairus Farok
Everyone aims to achieve financial freedom. Whether you're a student starting out in your first job, or a person set on retiring from work life, that is a constant aspiration which everyone aims towards achieving. The need to be free from financial worries has been one of things in current contemporary times that is very much like the personal holy grail of the everyday man.
Unfortunately, the recent financial crisis has shattered some dreams of people who plan to retire and be financially free. At the same time what we see here is also the jarring fact that a lot of people around the world are financially illiterate, and constantly buying into schemes promising safe returns, yet not seeing this fulfilled. Hence, in this uncertain times, having some measure of financial intelligence would allow us to survive these daunting times. Some of these lessons are things I've learned from the game Cashflow 101, and these are things I wish to share here.
1) Invest not for capital gains, but largely to increase cashflow.
One of the first things I've realised when playing cash flow is that, the only way you can get out of the purported Rat Race is that you must invest for cashflow and not always for capital gains. the term Cashflow is self explanatory to everyone. Capital Gains basically means the profit you'll earn when the price of a property or security will increase. Sure you may need to invest in capital gains opportunities to generate cash for your other more lucrative investments, but never forget that increasing your amount of passive income or cashflow is the ultimate goal in getting out of the rat race.
2) Know how to use debt effectively.
In the game and in his books, Robert Kiyosaki talks about how you need to learn how to use debt in a good way and avoid using it in a bad way. This is pretty evident in the game. The basic premise of debt is that you can apply for a debt to buy whatever properties, but only if the debt allows you to purchase something that would increase your positive net cash flow. For example, if your cashflow from a rental property is $250 and you're only required to take a bank loan which needs you to make monthly payments of $200, that effectively means that you add a net cashflow of $50 per month. That's good debt right there. Of course, a bad use of debt will result in you decreasing your cashflow instead of increasing it.
3) Cut down your expenses
Anything that increases your cashflow will help, and this is one of the ways you can increase it. By paying off your expenses as much as possible like any personal debt and personal mortgages, your reduced expenses will contribute to increased cashflow. Plain logic.
4) Keep Learning!!! (Most Important Lesson)
This one takes the cake. You need to keep learning and expanding your financial knowledge and literacy. Take lessons about investment. Read widely. Learn how to invest and how you can read world financial trends. Never stop learning. The common analogy used here is, "You'll only become a safe driver, but only if you're willing to take the lessons and follow through on those lessons." The same also applies to financial literacy and learning.
Hence, those are just some of the insights I would like to share with you when playing the game Cashflow. I think this game will benefit anyone willing to take the time to play it consistently. It does not matter if you win or lose. Just play to learn, and of course, continue to learn some more about the financial world around us by reading books and joining seminars or webinars. Do go to the Rich Dad website if you want to learn more as they have some fantastic resources there.
Fairus Farok is an avid photographer, a part time tutor and also a fitness buff. Currently studying at the National University of Singapore. He is now delving into other income opportunities such as investment and affiliate marketing. Visit his website at [http://www.fairusfarok.com]FairusFarok.com
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