One Day Multi-Millionaire

0925H

the board gameShayne, Lou, Art, Gemma, Armi and I gathered at our assigned table.  Hero (first time banker) and Rhyan were already there to moderate the game.  A round of introductions and usual reading of the house rules followed.  It was our second time time to play Cashflow 101 and we have had two missions:  get out of the rat race (move to the  fast track lane) and bankrupt the banker.

0945H

All players shared the same lot.  We are all doctors earning a salary of $13,200.  We do not have other source of income while each of us have a savings amounting only to $400.

Expenses amount to $9,650 covering the following items:  taxes ($3,420), home mortgage ($1,900), school loan payment ($750), car payment ($380), credit card payment ($270), retail payment ($50), other expenses ($2,880).

That gives each player a monthly cash flow of $3,550, an amount also equivalent to money we will receive from the bank each time we land on “Paycheck”.

 Back to the mission:  For any of us to get out of the rat race, one must generate a passive income that exceeds his/her monthly expenses.  Passive income, which can be derived from earnings from interest, dividends, real estate and businesses must be more than $ 9,650.

1015H

The game went on smoothly.  I already had two doodads, a fishing rod ($100) and a bowling bowl ($80) and several times I received my paycheck but not enough to buy me stocks and properties.  I loaned money from the bank twice:  to buy 2,000 shares of ON2U stocks from Armi (par value $5) and to buy a 2 BR/2BA condominium unit worth $10,000. 

Before the end of the first hour in the game, I got downsized.  That means I have to pay all my expenses plus I have to miss two rounds.  I have never imagined it to be too devastating.

1106H

I was back in the game.  I rolled the die and voila:  it’s a baby!  Per child expense is $640 added to my monthly expenses.  A few rounds after I got myself another baby while my cashflow is down to only $910.

Fortunately my misery ended there.   After a while, lady luck was smiling at me:  market went boom increasing the value of ON2U stock to $40 par.  I sold my shares to the bank and shopped for real properties and more stocks:  MYT4U, OK4U, ON2U. 

11:40

At our third hour in the game, only Armi (?) was out in the fast track.  I  already had $11.25 million in cash but still imprisoned in the rat race.  I kept on buying properties to increase my passive income and therefore, my cashflow.  The banker ran out of cash before the fourth hour.  That’s one mission accomplished.  Another one to go.

12:09  The Fast Track 

With so many cash in my hands, I paid off all my debts amounting to some $400,000.  My expenses were down to not more than $5,000.  I finally made it out of the rat race with a total income amounting to $21,900, $8,700 of which came from my passive income. 

In the fast track, we have a new mission:  to land on our dream and that was ski alps adventure for me.  Life in the fast track was easy and very comfortable.  Too many vacations you can take, too many businesses you can buy.  The best thing is:  no more paycheck.  Money comes often and frequent.  Ah, the good life!

At 12:18pm, I was four spaces away from my dream spot.  I let the die shake up in my palm, rolled it gently to the board, while from a soft murmur to a loud shout, I repeatedly said, “give me a four!”

And four it was!  I landed on my dream.

Playing Cashflow 101 gives me an adrenaline rush.  It also forces me to think and strategize.  It also fosters friendship among players.  Best of all, I  learned to take risk, raise money, make wise decisions, beat the odds, trust my instincts, be aware of my environment, negotiate, and most importantly, enjoy my moment with my money.

r u E S or B I?

I’ve been reading a lot of Robert Kiyosaki these days and I feel enlightened. Like a child in his first Aha! moment, I was surprised by the profundity and power of this book and at the same time, annoyed at myself for not having read Kiyosaki’s books sooner.

51ohfre8lgl__bo2204203200_pisitb-sticker-arrow-clicktopright35-76_aa240_sh20_ou01_1I spent almost four years in B-school but not one of my professors there ever mentioned or made Kiyosaki a required reading.  In fact, these types of books were classified as self-help and students were told to shy away from, like the plague, because self-helps, we were told, are just commercial ploys intended to capture the single-minded non-readers.

They were right about the single-minds but wrong about Kiyosaki.

The book’s power lies in its simplicity, honesty, matter-of-fact discussions, and use of stories, or allegories to drive home a point.  I was not at all bothered by those who criticizes Kiyosaki for the seemingly fictional characterization of his Rich Dad (no one can locate him and Kiyosaki is mum about his whereabouts) because, I guess the use of Rich Dad is a literally license.

Rich Dad Poor Dad, like his other books, is for those who want to be wealthy.  The first step to creating wealth is to find out where you are right now.  Kiyosaki thus introduces the Cashflow Quadrants:  the E for employment, S for small business and self-employment, B for big business and I for investments. 

He said that most people were/ are educated to become good employees who pay their taxes religiously (since income taxes are automatically deducted in company’s payroll), and eventually retire upon reaching the age of 65, hoping that their pension plans can pay for their lifestyle after retirement.  People in this quadrant are POOR.

The other poor people are those who have small businesses, the kind where owner is also the sole employee.  Poor people have one thing in common:  they lack passive income and they thrive in fear (fear of losing their jobs, fear of investing their money).

The other two quadrants are where the rich people are:  big business owners and investors.  Rich people are risk takers because they understand what they are doing.  They are not only educated in the traditional school sense but they have, most importantly invested much time in their financial education.  While poor people work for money, rich people let their money work for them. 

Unfortunately, our formal education system does not teach us these things.  Is there a grand conspiracy somewhere to make people stay poor?  I won’t allow myself to be a victim of that. In fact, I have given up my Saturday mornings for my financial education.  I’ve been attending the Cashflow games in Ortigas Center organized by the Create Abundance 2020 Business Community Continue reading