“You Just Gotta Get That Nugget…”

I have made a habit of asking my students, “What do you plan to do to become wealthy?”  

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The inner loop is the Rat Race; the outer border is where the rich people play.

I usually get blank stares, especially from the new ones.  They’re thinking, “Uhhh….I thought being an aircraft mechanic would do it, that’s why I’m here.”  I can see it on their faces, they’ve never been told anything else before.  I usually follow up by telling them that while they’ll make a decent living as an aircraft mechanic, no, they won’t become rich by doing it.  The main thrust is to jar their attention into what I tell them next, which is about Robert Kiyosaki’s book, “Rich Dad, Poor Dad.”  (Click the link to get to the book.)  They’re usually all ears at that point.

I read this book first about five years ago, and I about fell off the couch.  I was sitting around wondering what rich people do that I don’t (because it was obvious my career wasn’t paying me like I’d hoped), and this book gave me the answer:  I keep buying crap!

Enter Robert Kiyosaki’s brainchild, “Cashflow 101.”  Cashflow 101 is a board game, and it ain’t cheap.  I asked for it for Christmas, and my siblings chided me for being weird.  (I don’t suppose I blame them, given our backgrounds.)  What’s so great about a $100 board game, you might ask?  The answer is that it goes miles to teach you first-hand how rich people think of money, and it does this by literally forcing you manage a profit-and-loss statement as you play the game.  A prime example is your home:  You probably think that your home (if you own it) is an asset to you, right?  Well, according to rich people, your home is a liability because it costs you money each month.  The only point in time where you can view it as an asset is when it sells for more than you paid for it.  Which, as we’ve seen over the past five years in particular, is not always the case.  You notice this fact when, each month on your statement, you lose money by paying bills on the home.  

Additionally, instead of buying businesses, stocks, or real estate for investment purposes, we tend to spend our money on “Doodads,” or effectively, crap we don’t need.  Extra stuff.  A night at the movies.  A trip to Hawaii.  iPads, cell phones, and other electronics.  

The point of the game is to illustrate to us why we are so averse to doing things with our money that will compound our money for us, and instead stick to the safe act of buying Doodads (crap) each month.  The fact is, when I played this game for the first time, I happened to be alone (I was so excited to play it, I couldn’t wait for Alli to come home to Tucson from Chicago at the time).  It took me — no joke — three hours to “Get out of the rat race.”  And I had no opponent.  The reason is because I was always taught to “be safe” with my money, which basically means “Pay all your bills, blow a little of what’s left on extras.”  Guess what: Playing that way only left me in the Rat Race hour after hour, making no progress at all.  The key is to eventually learn that you need to do something different.

How like life, right?  That’s what we are faced with in this country, and it doesn’t have to be that way.  The way to get out of the Rat Race is to find a way to get that first little nugget of cash that you can invest in something bigger:  A duplex to rent out, a small business (like a carwash or self-storage unit) to manage, or figure out a way to get some cash from the stock market or a home sale.  Then, take that nugget, and scale it up.  Eventually, you’ll have more passive income (read: cash you didn’t lift a finger for) than bills.  Read that again:  Eventually you will have more money coming in than bills going out.  Pretty decent, right?

Trust me, I’ve had this game for a few years now, and it’s worth every penny.   And, if you can’t afford it just yet, you can either find someone who owns it, or find a Meetup Group in your area which plays it — they are all over the place, in nearly every city.  You need to find a way to play this game.  Multiple times.  It will turn every get-your-degree, climb-the-corporate-ladder idea we’ve ever been taught on its head…and that’s a good thing.

(By the way, I’m not a paid shill or anything for the book or the game; they have literally transformed the way I view my finances and my long-term plan, and I wanted you to know about it.)

Do you have this game?  Do you have thoughts on this book?  Let me know when you’ll be in the DC area, and you’re welcome by our place for a couple of bottles of wine, a cigar, and Cashflow 101.  (Click the link for an overview of the game.  You’ll be glad you did.)

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    • Kirk
    • June 29th, 2013

    Wine, a cigar, AND entertainment? I’m in!

  1. Good post, buddy. I’m not as concerned with being wealthy as I am with being financially stable, and having time to be with my wife and kids. Dave Ramsey’s book The Total Money Makeover helped put a lot in perspective for me when it comes to finances. Since I read the book and Rach and I implemented his plan, we’ve got more money in the bank than we ever had, and we’re close to paying off my car and our new furnace (we’ve already paid off her car and some of my grad classes). We’ve also cut back on a few things, namely our TV and cell phone bills, and not buying nearly as much good beer as we once did.

    By the Fall, the only debt we’ll have is my student loans, which we’ll concentrate on, and the mortgage. Paying off that debt is what’s going to allow Rach to be a stay-at-home mom, which is priority number one for us. It’s amazing what you can do when you put a plan in place!

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