Income is important, but ultimately, the size of your paycheck doesn’t make you rich.
If you’re dedicating 2016 to growing your wealth, start by sticking to one money resolution: Prioritise assets over income.
That’s what Robert Kiyosaki, author of “Rich Dad Poor Dad,” recommends — and is even concentrating on himself for the upcoming year.
“My goal is to stay focused on assets over income,” he told Business Insider of his 2016 financial resolution.
“That’s how we get (and keep) our money working for us — instead of working hard for money (i.e. a paycheck) all our lives. By creating or acquiring cash-flowing assets — in any of the asset classes — my wife, Kim, and I grow our wealth. We continue to remind ourselves that ‘cash flow is king’ and that assets are the foundation for creating true financial freedom.”
Cash-flowing assets are things like stocks, bonds, and intellectual property, while liabilities include mortgages, consumer loans, and credit cards. The ability to distinguish the two is crucial if you want to build wealth.
It seems obvious, but Kiyosaki says many people get it wrong. “Most people struggle financially because they do not know the difference between an asset and a liability,” he writes in “Rich Dad, Poor Dad.” “An asset puts money in my pocket. A liability takes money out of my pocket.”
“Rich people acquire assets,” he continues. “The poor and middle class acquire liabilities that they think are assets.”
Make 2016 a year of acquiring true, income-generating assets. If you’re interested in investing, read up on the basics before diving in.