Saturday, October 14, 2006

How Many Streams Of Income Do You Have?

In Rich Dad Poor Dad, Robert Kiyosaki outlines the differences between assets and liabilities. Assets put money in your pocket, liabilities take money out.

When you build a business, the objective is putting money in your pocket. As you build a business, you are working to establish a business that will continue paying you even when you've decided to take a break from the business. That's called residual or passive income. And that's the key to retiring early and retiring free.

If you haven't read Multiple Streams of Income, within the pages is a great concept that is important to understand: You accelerate your earning potential, as well as the speed with which you can retire when you increase the number of passive income businesses you are building.

Another aspect of the streams concept is controlling the outflow of your streams (ie your expenses). By increasing your income with income from passive income businesses, while managing your expenses you will start to the path to financial freedom ... how these residual streams of income will allow you to quit your current job and spend more time on the things you enjoy.

Robert Kiyosaki outlines three asset classes and as you build your passive income, he advises having passive income in all three areas: business, real estate and investments. He also recommends learning one, mastering it and moving on to the next.

So, since this blog is all about business, we are focussing here on building a series of passive income businesses. Those passive income businesses ultimately provide money to invest in the other asset classes.

That's the road to stability and financial freedom.

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