WEALTH vs MONEY

“Whether rich or poor, we all have money problems; the difference is how we go about solving them. For the rich they solve their money problems by building systems (assets) that generate money for them; the poor simply go work (labour) for money. “

Wealth is not the accumulation of money ever thirty days. The source of wealth is not a paycheck (job). The source of wealth is an asset (business). Wealth is not the accumulation of money, but the accumulation of assets that perpetually generate money. Wealth is income earned from assets (business and investments). Money is income earned from labour (job and self employment). Both are never the same thing!
What is wealth?
According to Robert Kiyosaki, wealth is the ability to survive so many number of days forward without working. For example, if all I have to my name is $1000 in savings and my living expenses are $100 a day, then my wealth is ten days. If on the other hand, my living expenses are $50 a day, then my wealth is twenty days. This is calculated by dividing the living expenses per day by the total amount of money one has in that particular time. Which means wealth is measured by how many number of days one can survive with the current one’s current level of living without a paycheck.
Health and wealth are similar. Like when a doctor says “you have six months to live”, a banker or accountant “you are six months away from being g poor”. Wealth is not measured in money; instead wealth is measured in time. It is not a matter of accumulation (savings), but a matter of generation (cash flows). Wealth answers this question; “how much money are your assets generating?” and not this question; “how much money are you making or saving?” You’ll notice that wealth is continuous so long as the assets are supervised, but savings can be truncated at any time since the source of your savings is a job. Wealthy people don’t save money, they invest it. Their assets have the capacity to generate more than they need such that whatever excess is left is not accumulated (saved) but rather re-invested into the same asset or other assets in order to generate more wealth. It’s a continuous cycle of cash flows, that’s why the rich get richer. The secret? Is that they build assets that generate wealth while the poor do jobs that allows them save more.
You cannot save wealth, you can only save money. Why? The source of wealth is not money but assets. Wealth is always generated, built or created from assets not money. Wealth like I said before addresses this questions; firstly, “how much cash flows (income) can your assets (business or investment) generate?” and secondly, “how long can they (assets) continue to generate that cash flow? (Income) Until you can confidently answer these two questions never assume you are financially free; you’re still in the rat race. Never assume your problem of money is over; they are only some days away from re-appearing! to be continued...