f¡¡24£»¡¡are¡¡earning¡¡millions¡¡of¡¡dollars¡¡a¡¡year£»¡¡and¡¡are¡¡sleeping¡¡under¡¡a¡¡bridge¡¡by¡¡age¡¡34¡£¡¡In¡¡the¡¡paper¡¡this¡¡morning£»¡¡as¡¡I¡¡write¡¡this£»¡¡there¡¡is¡¡a¡¡story¡¡of¡¡a¡¡young¡¡basketball¡¡player¡¡who¡¡a¡¡year¡¡ago¡¡had¡¡millions¡£¡¡Today£»¡¡he¡¡claims¡¡his¡¡friends£»¡¡attorney¡¡and¡¡accountant¡¡took¡¡his¡¡money£»¡¡and¡¡now¡¡he¡¡works¡¡at¡¡a¡¡car¡¡wash¡¡for¡¡minimum¡¡wage¡£
He¡¡is¡¡only¡¡29¡£¡¡He¡¡was¡¡fired¡¡from¡¡the¡¡car¡¡wash¡¡because¡¡he¡¡refused¡¡to¡¡take¡¡off¡¡his¡¡championship¡¡ring¡¡as¡¡he¡¡was¡¡wiping¡¡off¡¡the¡¡cars£»¡¡so¡¡his¡¡story¡¡made¡¡the¡¡newspaper¡£¡¡He¡¡is¡¡appealing¡¡his¡¡termination£»¡¡claiming¡¡hardship¡¡and¡¡discrimination¡¡and¡¡that¡¡the¡¡ring¡¡is¡¡all¡¡he¡¡has¡¡left¡£¡¡He¡¡claims¡¡that¡¡if¡¡you¡¡take¡¡that¡¡away£»¡¡he'll¡¡crumble¡£
In¡¡1997£»¡¡I¡¡know¡¡so¡¡many¡¡people¡¡who¡¡are¡¡being¡¡instant¡¡millionaires¡£¡¡It's¡¡the¡¡Roaring¡¡'20s¡¡one¡¡more¡¡time¡£¡¡And¡¡while¡¡I¡¡am¡¡glad¡¡people¡¡have¡¡been¡¡getting¡¡richer¡¡and¡¡richer£»¡¡I¡¡only¡¡caution¡¡that¡¡in¡¡the¡¡long¡¡run£»¡¡it's¡¡not¡¡how¡¡much¡¡you¡¡make£»¡¡it's¡¡how¡¡much¡¡you¡¡keep£»¡¡and¡¡how¡¡many¡¡generations¡¡you¡¡keep¡¡it¡£
So¡¡when¡¡people¡¡ask£»¡¡¡¨Where¡¡do¡¡I¡¡get¡¡started£¿¡¨¡¡or¡¡¡¨Tell¡¡me¡¡how¡¡to¡¡get¡¡rich¡¡quick£»¡¨¡¡they¡¡often¡¡are¡¡greatly¡¡disappointed¡¡with¡¡my¡¡answer¡£¡¡I¡¡simply¡¡say¡¡to¡¡them¡¡what¡¡my¡¡rich¡¡dad¡¡said¡¡back¡¡to¡¡me¡¡when¡¡I¡¡was¡¡a¡¡little¡¡kid¡£¡¡¡¨If¡¡you¡¡want¡¡to¡¡be¡¡rich£»¡¡you¡¡need¡¡to¡¡be¡¡financially¡¡literate¡£¡¨
That¡¡idea¡¡was¡¡drummed¡¡into¡¡my¡¡head¡¡every¡¡time¡¡we¡¡were¡¡together¡£¡¡As¡¡I¡¡said£»¡¡my¡¡educated¡¡dad¡¡stressed¡¡the¡¡importance¡¡of¡¡reading¡¡books£»¡¡while¡¡my¡¡rich¡¡dad¡¡stressed¡¡the¡¡need¡¡to¡¡master¡¡financial¡¡literacy¡£
If¡¡you¡¡are¡¡going¡¡to¡¡build¡¡the¡¡Empire¡¡State¡¡Building£»¡¡the¡¡first¡¡thing¡¡you¡¡need¡¡to¡¡do¡¡is¡¡dig¡¡a¡¡deep¡¡hole¡¡and¡¡pour¡¡a¡¡strong¡¡foundation¡£¡¡If¡¡you¡¡are¡¡going¡¡to¡¡build¡¡a¡¡home¡¡in¡¡the¡¡suburbs£»¡¡all¡¡you¡¡need¡¡to¡¡do¡¡is¡¡pour¡¡a¡¡6¡inch¡¡slab¡¡of¡¡concrete¡£¡¡Most¡¡people£»¡¡in¡¡their¡¡drive¡¡to¡¡get¡¡rich£»¡¡are¡¡trying¡¡to¡¡build¡¡an¡¡Empire¡¡State¡¡Building¡¡on¡¡a¡¡6¡inch¡¡slab¡£
Our¡¡school¡¡system£»¡¡having¡¡been¡¡created¡¡in¡¡the¡¡Agrarian¡¡Age£»¡¡still¡¡believes¡¡in¡¡homes¡¡with¡¡no¡¡foundation¡£¡¡Dirt¡¡floors¡¡are¡¡still¡¡the¡¡rage¡£¡¡So¡¡kids¡¡graduate¡¡from¡¡school¡¡with¡¡virtually¡¡no¡¡financial¡¡foundation¡£¡¡One¡¡day£»¡¡sleepless¡¡and¡¡deep¡¡in¡¡debt¡¡in¡¡suburbia£»¡¡living¡¡the¡¡American¡¡Dream£»¡¡they¡¡decide¡¡that¡¡the¡¡answer¡¡to¡¡their¡¡financial¡¡problems¡¡is¡¡to¡¡find¡¡a¡¡way¡¡to¡¡get¡¡rich¡¡quick¡£
Construction¡¡on¡¡the¡¡skyscraper¡¡begins¡£¡¡It¡¡goes¡¡up¡¡quickly£»¡¡and¡¡soon£»¡¡instead¡¡of¡¡the¡¡Empire¡¡State¡¡Building£»¡¡we¡¡have¡¡the¡¡Leaning¡¡Tower¡¡of¡¡Suburbia¡£¡¡The¡¡sleepless¡¡nights¡¡return¡£
As¡¡for¡¡Mike¡¡and¡¡me¡¡in¡¡our¡¡adult¡¡years£»¡¡both¡¡of¡¡our¡¡choices¡¡were¡¡possible¡¡because¡¡we¡¡were¡¡taught¡¡to¡¡pour¡¡a¡¡strong¡¡financial¡¡foundation¡¡when¡¡we¡¡were¡¡just¡¡kids¡£
Now£»¡¡accounting¡¡is¡¡possibly¡¡the¡¡most¡¡boring¡¡subject¡¡in¡¡the¡¡world¡£¡¡It¡¡also¡¡could¡¡be¡¡the¡¡most¡¡confusing¡£¡¡But¡¡if¡¡you¡¡want¡¡to¡¡be¡¡rich£»¡¡long¡¡term£»¡¡it¡¡could¡¡be¡¡the¡¡most¡¡important¡¡subject¡£¡¡The¡¡question¡¡is£»¡¡how¡¡do¡¡you¡¡take¡¡a¡¡boring¡¡and¡¡confusing¡¡subject¡¡and¡¡teach¡¡it¡¡to¡¡kids£¿¡¡The¡¡answer¡¡is£»¡¡make¡¡it¡¡simple¡£¡¡Teach¡¡it¡¡first¡¡in¡¡pictures¡£
My¡¡rich¡¡dad¡¡poured¡¡a¡¡strong¡¡financial¡¡foundation¡¡for¡¡Mike¡¡and¡¡me¡£¡¡Since¡¡we¡¡were¡¡just¡¡kids£»¡¡he¡¡created¡¡a¡¡simple¡¡way¡¡to¡¡teach¡¡us¡£¡¡For¡¡years¡¡he¡¡only¡¡drew¡¡pictures¡¡and¡¡used¡¡words¡£¡¡Mike¡¡and¡¡I¡¡understood¡¡the¡¡simple¡¡drawings£»¡¡the¡¡jargon£»¡¡the¡¡movement¡¡of¡¡money£»¡¡and¡¡then¡¡in¡¡later¡¡years£»¡¡rich¡¡dad¡¡began¡¡adding¡¡numbers¡£¡¡Today£»¡¡Mike¡¡has¡¡gone¡¡on¡¡to¡¡master¡¡much¡¡more¡¡plex¡¡and¡¡sophisticated¡¡accounting¡¡analysis¡¡because¡¡he¡¡has¡¡had¡¡to¡£¡¡He¡¡has¡¡a¡¡billion¡dollar¡¡empire¡¡to¡¡run¡£¡¡I¡¡am¡¡not¡¡as¡¡sophisticated¡¡because¡¡my¡¡empire¡¡is¡¡smaller£»¡¡yet¡¡we¡¡e¡¡from¡¡the¡¡same¡¡simple¡¡foundation¡£¡¡In¡¡the¡¡following¡¡pages£»¡¡I¡¡offer¡¡to¡¡you¡¡the¡¡same¡¡simple¡¡line¡¡drawings¡¡Mike's¡¡dad¡¡created¡¡for¡¡us¡£¡¡Though¡¡simple£»¡¡those¡¡drawings¡¡helped¡¡guide¡¡two¡¡little¡¡boys¡¡in¡¡building¡¡great¡¡sums¡¡of¡¡wealth¡¡on¡¡a¡¡solid¡¡and¡¡deep¡¡foundation¡£
Rule¡¡One¡£¡¡You¡¡must¡¡know¡¡the¡¡difference¡¡between¡¡an¡¡asset¡¡and¡¡a¡¡liability£»¡¡and¡¡buy¡¡assets¡£¡¡If¡¡you¡¡want¡¡to¡¡be¡¡rich£»¡¡this¡¡is¡¡all¡¡you¡¡need¡¡to¡¡know¡£¡¡It¡¡is¡¡Rule¡¡No¡£¡¡1¡£¡¡It¡¡is¡¡the¡¡only¡¡rule¡£¡¡This¡¡may¡¡sound¡¡absurdly¡¡simple£»¡¡but¡¡most¡¡people¡¡have¡¡no¡¡idea¡¡how¡¡profound¡¡this¡¡rule¡¡is¡£¡¡Most¡¡people¡¡struggle¡¡financially¡¡because¡¡they¡¡do¡¡not¡¡know¡¡the¡¡difference¡¡between¡¡an¡¡asset¡¡and¡¡a¡¡liability¡£
¡¨Rich¡¡people¡¡acquire¡¡assets¡£¡¡The¡¡poor¡¡and¡¡middle¡¡class¡¡acquire¡¡liabilities£»¡¡but¡¡they¡¡think¡¡they¡¡are¡¡assets¡¨
When¡¡rich¡¡dad¡¡explained¡¡this¡¡to¡¡Mike¡¡and¡¡me£»¡¡we¡¡thought¡¡he¡¡was¡¡kidding¡£¡¡Here¡¡we¡¡were£»¡¡nearly¡¡teenagers¡¡and¡¡waiting¡¡for¡¡the¡¡secret¡¡to¡¡getting¡¡rich£»¡¡and¡¡this¡¡was¡¡his¡¡answer¡£¡¡It¡¡was¡¡so¡¡simple¡¡that¡¡we¡¡had¡¡to¡¡stop¡¡for¡¡a¡¡long¡¡time¡¡to¡¡think¡¡about¡¡it¡£
¡¨What¡¡is¡¡an¡¡asset£¿¡¨¡¡asked¡¡Mike¡£
¡¨Don't¡¡worry¡¡right¡¡now£»¡¨¡¡said¡¡rich¡¡dad¡£¡¡¡¨Just¡¡let¡¡the¡¡idea¡¡sink¡¡in¡£¡¡If¡¡you¡¡can¡¡prehend¡¡the¡¡simplicity£»¡¡your¡¡life¡¡will¡¡have¡¡a¡¡plan¡¡and¡¡be¡¡financially¡¡easy¡£¡¡It¡¡is¡¡simple£»¡¡that¡¡is¡¡why¡¡the¡¡idea¡¡is¡¡missed¡£¡¨
¡¨You¡¡mean¡¡all¡¡we¡¡need¡¡to¡¡know¡¡is¡¡what¡¡an¡¡asset¡¡is£»¡¡acquire¡¡them¡¡and¡¡we'll¡¡be¡¡rich£¿¡¨¡¡I¡¡asked¡£
Rich¡¡dad¡¡nodded¡¡his¡¡head¡£¡¡¡¨It's¡¡that¡¡simple¡£¡¨
¡¨If¡¡it's¡¡that¡¡simple£»¡¡how¡¡e¡¡everyone¡¡is¡¡not¡¡rich£¿¡¨¡¡I¡¡asked¡£
Rich¡¡dad¡¡smiled¡£¡¡¡¨Because¡¡people¡¡do¡¡not¡¡know¡¡the¡¡difference
between¡¡an¡¡asset¡¡and¡¡a¡¡liability¡£¡¨
I¡¡remember¡¡asking£»¡¡¡¨How¡¡could¡¡adults¡¡be¡¡so¡¡silly¡£¡¡If¡¡it¡¡is¡¡that¡¡simple£»¡¡if¡¡it¡¡is¡¡that¡¡important£»¡¡why¡¡would¡¡everyone¡¡not¡¡want¡¡to¡¡find¡¡out£¿¡¨
It¡¡took¡¡our¡¡rich¡¡dad¡¡only¡¡a¡¡few¡¡minutes¡¡to¡¡explain¡¡what¡¡assets¡¡and¡¡liabilities¡¡were¡£
As¡¡an¡¡adult£»¡¡I¡¡have¡¡difficulty¡¡explaining¡¡it¡¡to¡¡other¡¡adults¡£¡¡Why£¿¡¡Because¡¡adults¡¡are¡¡smarter¡£¡¡In¡¡most¡¡cases£»¡¡the¡¡simplicity¡¡of¡¡the¡¡idea¡¡escapes¡¡most¡¡adults¡¡because¡¡they¡¡have¡¡been¡¡educated¡¡differently¡£¡¡They¡¡have¡¡been¡¡educated¡¡by¡¡other¡¡educated¡¡professionals£»¡¡such¡¡as¡¡bankers£»¡¡accountants£»¡¡real¡¡estate¡¡agents£»¡¡financial¡¡planners£»¡¡and¡¡so¡¡forth¡£¡¡The¡¡difficulty¡¡es¡¡in¡¡asking¡¡adults¡¡to¡¡unlearn£»¡¡or¡¡bee¡¡children¡¡again¡£¡¡An¡¡intelligent¡¡adult¡¡often¡¡feels¡¡it¡¡is¡¡demeaning¡¡to¡¡pay¡¡attention¡¡to¡¡simplistic¡¡definitions¡£
Rich¡¡dad¡¡believed¡¡in¡¡the¡¡KISS¡¡principle¡¡¨Keep¡¡It¡¡Simple¡¡Stupid¡¨¡so¡¡he¡¡kept¡¡it¡¡simple¡¡for¡¡two¡¡young¡¡boys£»¡¡and¡¡that¡¡made¡¡the¡¡financial¡¡foundation¡¡strong¡£
So¡¡what¡¡causes¡¡the¡¡confusion£¿¡¡Or¡¡how¡¡could¡¡something¡¡so¡¡simple¡¡be¡¡so¡¡screwed¡¡up£¿¡¡Why¡¡would¡¡someone¡¡buy¡¡an¡¡asset¡¡that¡¡was¡¡really¡¡a¡¡liability¡£¡¡The¡¡answer¡¡is¡¡found¡¡in¡¡basic¡¡education¡£
We¡¡focus¡¡on¡¡the¡¡word¡¡¡¨literacy¡¨¡¡and¡¡not¡¡¡¨financial¡¡literacy¡£¡¨¡¡What¡¡defines¡¡something¡¡to¡¡be¡¡an¡¡asset£»¡¡or¡¡something¡¡to¡¡be¡¡a¡¡liability¡¡are¡¡not¡¡words¡£¡¡In¡¡fact£»¡¡if¡¡you¡¡really¡¡want¡¡to¡¡be¡¡confused£»¡¡look¡¡up¡¡the¡¡words¡¡¡¨asset¡¨¡¡and¡¡¡¨liability¡¨¡¡in¡¡the¡¡dictionary¡£¡¡I¡¡know¡¡the¡¡definition¡¡may¡¡sound¡¡good¡¡to¡¡a¡¡trained¡¡accountant£»¡¡but¡¡for¡¡the¡¡average¡¡person¡¡it¡¡makes¡¡no¡¡sense¡£¡¡But¡¡we¡¡adults¡¡are¡¡often¡¡too¡¡proud¡¡to¡¡admit¡¡that¡¡something¡¡does¡¡not¡¡make¡¡sense¡£
As¡¡young¡¡boys£»¡¡rich¡¡dad¡¡said£»¡¡¡¨What¡¡defines¡¡an¡¡asset¡¡is¡¡not¡¡words¡¡but¡¡numbers¡£¡¡And¡¡if¡¡you¡¡cannot¡¡read¡¡the¡¡numbers£»¡¡you¡¡cannot¡¡tell¡¡an¡¡asset¡¡from¡¡a¡¡hole¡¡in¡¡the¡¡ground¡£¡¨
¡¨In¡¡accounting£»¡¨¡¡rich¡¡dad¡¡would¡¡say£»¡¡¡¨it's¡¡not¡¡the¡¡numbers£»¡¡but¡¡what¡¡the¡¡numbers¡¡are¡¡telling¡¡you¡£¡¡It's¡¡just¡¡like¡¡words¡£¡¡It's¡¡not¡¡the¡¡words£»¡¡but¡¡the¡¡story¡¡the¡¡words¡¡are¡¡telling¡¡you¡£
Many¡¡people¡¡read£»¡¡but¡¡do¡¡not¡¡understand¡¡much¡£¡¡It's¡¡called¡¡reading¡¡prehension¡£¡¡And¡¡we¡¡all¡¡have¡¡different¡¡abilities¡¡when¡¡it¡¡es¡¡to¡¡reading¡¡prehension¡£¡¡For¡¡example£»¡¡I¡¡recently¡¡bought¡¡a¡¡new¡¡VCR¡£¡¡It¡¡came¡¡with¡¡an¡¡instruction¡¡book¡¡that¡¡explained¡¡how¡¡to¡¡program¡¡the¡¡VCR¡£¡¡All¡¡I¡¡wanted¡¡to¡¡do¡¡was¡¡record¡¡my¡¡favorite¡¡TV¡¡show¡¡on¡¡Friday¡¡night¡£¡¡I¡¡nearly¡¡went¡¡crazy¡¡trying¡¡to¡¡read¡¡the¡¡manual¡£¡¡Nothing¡¡in¡¡my¡¡world¡¡is¡¡more¡¡plex¡¡than¡¡learning¡¡how¡¡to¡¡program¡¡my¡¡VCR¡£¡¡I¡¡could¡¡read¡¡the¡¡words£»¡¡but¡¡I¡¡understood¡¡nothing¡£¡¡I¡¡get¡¡an¡¡¡¨A¡¨¡¡for¡¡recognizing¡¡the¡¡words¡£¡¡I¡¡get¡¡an¡¡¡¨F¡¨¡¡for¡¡prehension¡£¡¡And¡¡so¡¡it¡¡is¡¡with¡¡financial¡¡statements¡¡for¡¡most¡¡people¡£
¡¨If¡¡you¡¡want¡¡to¡¡be¡¡rich£»¡¡you've¡¡got¡¡to¡¡read¡¡and¡¡understand¡¡numbers¡£¡¨¡¡If¡¡I¡¡heard¡¡that¡¡once£»¡¡I¡¡heard¡¡it¡¡a¡¡thousand¡¡times¡¡from¡¡my¡¡rich¡¡dad¡£¡¡And¡¡I¡¡also¡¡heard£»¡¡¡¨The¡¡rich¡¡acquire¡¡assets¡¡and¡¡the¡¡poor¡¡and¡¡middle¡¡class¡¡acquire¡¡liabilities¡£¡¨
Here¡¡is¡¡how¡¡to¡¡tell¡¡the¡¡difference¡¡between¡¡an¡¡asset¡¡and¡¡a¡¡liability¡£¡¡Most¡¡accountants¡¡and¡¡financial¡¡professionals¡¡do¡¡net¡¡agree¡¡with¡¡the¡¡definitions£»¡¡but¡¡these¡¡simple¡¡drawings¡¡were¡¡the¡¡start¡¡of¡¡strong¡¡financial¡¡foundations¡¡for¡¡two¡¡young¡¡boys¡£
To¡¡teach¡¡pre£¿teen¡¡boys£»¡¡rich¡¡dad¡¡kept¡¡everything¡¡simple£»¡¡using¡¡as¡¡many¡¡pictures¡¡as¡¡possible£»¡¡as¡¡few¡¡words¡¡as¡¡possible£»¡¡and¡¡no¡¡numbers¡¡for¡¡years¡£
¡¨This¡¡is¡¡the¡¡Cash¡¡Flow¡¡pattern¡¡of¡¡an¡¡asset¡£¡¨
¡¡¡¡¡¡
The¡¡above¡¡box¡¡is¡¡an¡¡Ine¡¡Statement£»¡¡often¡¡called¡¡a¡¡Profit¡¡and¡¡Loss¡¡Statement¡£¡¡It¡¡measures¡¡ine¡¡and¡¡expenses¡£¡¡Money¡¡in¡¡and¡¡money¡¡out¡£¡¡The¡¡bottom¡¡diagram¡¡is¡¡the¡¡Balance¡¡Sheet¡£¡¡It¡¡is¡¡called¡¡that¡¡because¡¡it¡¡is
supposed¡¡to¡¡balance¡¡assets¡¡against¡¡liabilities¡£¡¡Many¡¡financial¡¡novices¡¡don't¡¡know¡¡the¡¡relationship¡¡between¡¡the¡¡Ine¡¡Statement¡¡and¡¡the¡¡Balance¡¡Sheet¡£¡¡That¡¡relationship¡¡is¡¡vital¡¡to¡¡understand¡£
The¡¡primary¡¡cause¡¡of¡¡financial¡¡struggle¡¡is¡¡simply¡¡not¡¡knowing¡¡the¡¡difference¡¡between¡¡an¡¡asset¡¡and¡¡a¡¡liability¡£¡¡The¡¡cause¡¡of¡¡the¡¡confusion¡¡is¡¡found¡¡in¡¡the¡¡definition¡¡of¡¡the¡¡two¡¡words¡£¡¡If¡¡you¡¡want¡¡a¡¡lesson¡¡in¡¡confusion£»¡¡simply¡¡look¡¡up¡¡the¡¡words¡¡¡¨asset¡¨¡¡and¡¡¡¨liability¡¨¡¡in¡¡the¡¡dictionary¡£
Now¡¡it¡¡may¡¡make¡¡sense¡¡to¡¡trained¡¡accountants£»¡¡but¡¡to¡¡the¡¡average¡¡person£»¡¡it¡¡may¡¡as¡¡well¡¡be¡¡written¡¡in¡¡Mandarin¡£¡¡You¡¡read¡¡the¡¡words¡¡in¡¡the¡¡definition£»¡¡but¡¡true¡¡prehension¡¡is¡¡difficult¡£
So¡¡as¡¡I¡¡said¡¡earlier£»¡¡my¡¡rich¡¡dad¡¡simply¡¡told¡¡two¡¡young¡¡boys¡¡that¡¡¡¨assets¡¡put¡¡money¡¡in¡¡your¡¡pocket¡£¡¨¡¡Nice£»¡¡simple¡¡and¡¡usable¡£
¡¨This¡¡is¡¡Cash¡¡Flow¡¡pattern¡¡of¡¡a¡¡liability¡£¡¨
Now¡¡that¡¡assets¡¡and¡¡liabilities¡¡have¡¡been¡¡defined¡¡through¡¡pictures£»¡¡it¡¡may¡¡be¡¡easier¡¡to¡¡understand¡¡my¡¡definitions¡¡in¡¡words¡£
An¡¡asset¡¡is¡¡something¡¡that¡¡puts¡¡money¡¡in¡¡my¡¡pocket¡£
A¡¡liability¡¡is¡¡something¡¡that¡¡takes¡¡money¡¡out¡¡of¡¡my¡¡pocket¡£
This¡¡is¡¡really¡¡all¡¡you¡¡need¡¡to¡¡know¡£¡¡If¡¡you¡¡want¡¡to¡¡be¡¡rich£»¡¡simply¡¡spend¡¡your¡¡life¡¡buying¡¡assets¡£¡¡If¡¡you¡¡want¡¡to¡¡be¡¡poor¡¡or¡¡middle¡¡class£»¡¡spend¡¡your¡¡life¡¡buying¡¡liabilities¡£¡¡It's¡¡not¡¡knowing¡¡the¡¡difference¡¡that¡¡causes¡¡most¡¡of¡¡the¡¡financial¡¡struggle¡¡in¡¡the¡¡real¡¡world¡£
Illiteracy£»¡¡both¡¡in¡¡words¡¡and¡¡numbers£»¡¡is¡¡the¡¡foundation¡¡of¡¡financial¡¡struggle¡£¡¡If¡¡people¡¡are¡¡having¡¡difficulties¡¡financially£»¡¡there¡¡is¡¡something¡¡that¡¡they¡¡cannot¡¡read£»¡¡either¡¡in¡¡numbers¡¡or¡¡words¡£¡¡Something¡¡is¡¡misunderstood¡£¡¡The¡¡rich¡¡are¡¡rich¡¡because¡¡they¡¡are¡¡more¡¡literate¡¡in¡¡different¡¡areas¡¡than¡¡people¡¡who¡¡struggle¡¡financially¡£¡¡¡¡So¡¡if¡¡you¡¡want¡¡to¡¡be¡¡rich¡¡and¡¡maintain¡¡your¡¡wealth£»¡¡it's¡¡important¡¡to¡¡be¡¡financially¡¡literate£»¡¡in¡¡words¡¡as¡¡well¡¡as¡¡numbers¡£
The¡¡arrows¡¡in¡¡the¡¡diagrams¡¡represent¡¡the¡¡flow¡¡of¡¡cash£»¡¡or¡¡¡¨cash¡¡flow¡£¡¨¡¡Numbers¡¡alone¡¡really¡¡mean¡¡little¡£¡¡Just¡¡as¡¡words¡¡alone¡¡mean¡¡little¡£¡¡It's¡¡the¡¡story¡¡that¡¡counts¡£¡¡In¡¡financial¡¡reporting£»¡¡reading¡¡numbers¡¡is¡¡looking¡¡for¡¡the¡¡plot£»¡¡the¡¡story¡£¡¡The¡¡story¡¡of¡¡where¡¡the¡¡cash¡¡is¡¡flowing¡£¡¡In¡¡80¡¡percent¡¡of¡¡most¡¡