When it comes to money, what is the difference between security and freedom? What does it mean that money can’t be seen with the eyes? Recently I read ‘Cashflow Quadrant’ by Robert T. Kiyosaki, which explains the answers to these questions and more.

Robert Kiyosaki was born and raised in Hawaii. He is an American investor, businessman, self-help author and motivational speaker. ‘Cashflow Quadrant’ is his follow up book to the bestseller ‘Rich Dad, Poor Dad’. It reveals strategies for moving beyond just job security to greater financial security by generating wealth from four selective financial quadrants. These quadrants are what Mr. Kiyosaki calls the four types of people who make up the business world – employees, the self-employed / small business owner, the big business owner, and the investor. The goal of this book is to get us thinking about the benefits of moving from the left side quadrants (employee and self-employed) to the right side quadrants (big business owner and investor). This is where the two ideas that started this post come in. What is the difference between security and freedom? What does it mean that money can’t be seen with the eyes? Read on for my interpretation of Mr. Kiyosaki’s two theories.

Security vs. Freedom

Security is what we are taught in school and by our parents. It’s conditioned into us. Security tells us to get a degree, get a job, work for a pension, and save our pennies. Unfortunately, this lifestyle usually doesn’t provide us with the income we need for all those things we want, and so we get into debt. The more debt we get into, the more we are tied to our secure jobs and our secure paycheques. If we do work hard, however, we sometimes get to move up the corporate ladder. Unfortunately, in this structure, more success usual equals less time of your own to be with your family, to exercise, or to pursue your hobbies. This leads to stress, which leads to a myriad of health problems.  To add insult to injury, pursuing security as an employee or self-employed individual puts you into the highest tax brackets.

Freedom is what you get when you establish a healthy stream of passive income (cashflow). This could be from a business that you have built, but other people run. It could be from real estate, or it can be from different investments. Freedom means that you know how to build a business system and use other people’s time and money to create passive income for yourself. It also means that as a big business owner or investor you can take advantage of the many tax breaks offered, which leaves more cash in your pocket.

Money Cannot Be Seen With Your Eyes

Mr. Kiyosaki argues that money cannot be seen with your eyes. The reason for this is that using your eyes equals using your emotions. The pretty dress, the snazzy shoes, the slick-looking car. Your visual senses draw you in and your emotions of wanting take over.

The contrast to this is seeing money with your mind. Pursuing financial literacy, understanding real risk, knowing definitions and systems of numbers (ie. interest rates). Becoming smart about money and financial systems will allow you to approach want / need / spending / saving in a different way. It’s all about due diligence. Facts are greater than opinions, and greater than emotions. Be knowledgeable, not emotional.

These are just two key take-aways that I came away with from the book ‘Cashflow Quadrant’ by Robert T. Kiyosaki. If you’ve read ‘Rich Dad, Poor Dad’ a lot of these ideas may not be earth-shattering, but I feel it all comes down to education. This is a fairly easy read, and if it gets you thinking about your finances and leads you to other books / other trains of thought then it’s definitely well worth it.

For those with not as much time, I have provided a link below to YouTube, where Mr. Kiyosaki quickly goes over the four different cashflow quadrants. Once you view this video, you will find quite a few additional links to other cashflow quadrant videos.

So what do you think? Are you pursuing security or freedom? Do you see money with your eyes or with your mind? Let me know your thoughts, and thank you for visiting.

YouTube:   Robert Kiyosaki – Cashflow Quadrant  (click here if video below does not appear)

Related Posts:

• LTI Recommends: MoneySense Magazine (0)

“Time is what we want most, but what we use worst.” ~ William Penn

Everyone is given 24 hours in a day. Usually eight of those hours are for sleep, eight are for work, and eight are for you time (or family time). Just like your bank accounts, learning to budget your time is key to reducing stress and achieving your goals. It’s not about time management, it’s about self-management. You have a choice for how you spend your time. The key is finding what works best for you when it comes to planning out your days.

“Ordinary people think merely of spending time. Great people think of using it.” ~ Author Unknown

If you’re looking for some tips on how to plan your days, I have six great ones listed below for making the most of the hours given to you:

1) Time is wasted in minutes, not hours. Make the most of all the time you have, even if it’s just a minute here and there.

2) You can’t do everything, but you can do something. Make sure you keep clear in your mind what is important / not important and urgent / not urgent. Tasks that seem to be urgent, may not necessarily be important. “First Things First” by Stephen Covey dives into this theory, and shows you how you can categorize your important and / or urgent tasks.

3) Make a To-Do list – Plan & Prioritize. Another one of Stephen Covey’s key ideas is all about prioritizing your to-do list, but first you need to plan it out. This means making a list somewhere. Whether it be in your daily planning journal, your blackberry, your Google Calendar, or in a fun web app like TeuxDeux.com, write it down! Put all your tasks in front of you, then go to work on prioritizing what you need to tackle each day.

4) Be Realistic. I know each of us think we are super human and can get ten sizable tasks done each day, but guess what, sometimes that just isn’t possible. Sometimes we have tasks that will take up a big chunk of our day. Or sometimes we get distracted by more urgent tasks that come up out of the blue. When you are planning your day be realistic. Otherwise you will just end up frustrated at the end of it when you are looking at your ten tasks and only three have been completed.

5) Make a decision – Get it Done, Delegate, or Ditch. In other words, don’t procrastinate. When a task comes to you, decide which one of these three things you are going to do with it and make it happen. Don’t let yourself get bogged down in “I’ll look at that tomorrow”.

6) Complete one task each day that you don’t want to do, and tackle it in the morning. We all have those tasks that we know we need to do, but for whatever reason we just don’t want to do them. Maybe it’s making a dentist appointment, or maybe it’s calling that difficult customer. Whatever it is, make a goal to get it done early in the day. That way you can carry on with the rest of your day doing the things you don’t dread.

“If you want to make good use of your time, you’ve got to know what’s most important and then give it all you’ve got.” ~ Lee Iacocca

Keeping these six steps in mind, try to budget a few hours each week to working on your goals. Even if it’s just a couple hours a week, that’s better than nothing. In addition to this, sometimes doing nothing is the right thing to do. If you are always on the go, make sure you give yourself time to relax, meditate, or kick back and read a book. Those moments will give you more energy than you’d expect to refocus and take on the other tasks of the day.

A special thanks to the book “How to Succeed in Anything by Really Trying” by Lyman MacInnis (copyright 2008) for providing the framework of these ideas.

Please share your time-management / self-management comments or questions. I would love to hear from you.

“Take care of the minutes and the hours will take care of themselves.” ~ Lord Chesterfield

Related Posts:

• “How to Succeed in Anything By Really Trying” (2)
• 5 Steps To Accomplishing Your Goals (0)

I haven’t actually visited the MoneySense website in a while, but in preparing for this blog post I took another journey back. What I found was very exciting. They have given their website a facelift and now offer many different ways to connect with them (Twitter, Facebook, YouTube, RSS Feeds). Maybe it’s just me, but I really get excited about that because now I can have articles sent straight to my Google Reader, which I can then peruse every morning to see what catches my interest.

All this and I haven’t even mentioned the personal financial planning content! Since that is the most important part, the following is a list of the 7 key reasons you need to read MoneySense Magazine:

1.  Canadian Content – A lot of the time we are subjected to American content when it comes to financial news or personal financial planning. MoneySense offers all the news and information we need from a Canadian perspective.

2.  Online Content / Blog / Newsletter/ Forums – With so many options to connect, gaining access to this wealth of information is just a click away.

3.  Easy to Read – I love MoneySense for the fact that it uses plain english to explain financial matters for every level. This is the magazine I first started reading to learn more about investing and financial planning. Now I am a DRIP and ETF investor and take courses to learn more whenever I can. Talk about getting a head start.

4.  Topics include Planning / Investing / Real Estate / More – Another reason why Canadian content is important.

5.  Great Lists - Who doesn’t want to know what the best paying lottery in Canada is, the world’s top stocks, or the top countries to invest in?

6.  Get Your Subscription with Airmiles – Can it get any easier than this? Do you have a few Airmiles to spare? Head on over to www.airmiles.ca and get your subscription to MoneySense magazine.

7.  Couch Potato Investing – Learn how to manage your own portfolio of stocks in less than 15 minutes a year. It’s been a rocky couple of years, but the couch potato approach will give you a nice balanced portfolio that you can individually gear towards your own risk tolerance.

Hopefully I have convinced you to at least take a look at this site and think about learning more about your own personal finances. Education is the #1 key to taking control of your own financial situation, and for Canadians especially, it’s hard to find a better starting point than this.

Already a fan of MoneySense or enjoyed this post? Please leave a comment below to share your thoughts and expertise. Thank you!

Related Posts:

• Transparency & Celebrity: How the Face of Giving is Changing (2)
• Cashflow Quadrant: Money Cannot Be Seen With Your Eyes (0)

If you’re anything like me, plugging away at debt and not seeing any results can be very frustrating. Not only does my debt not seem to go down, but my savings are not going up, either. It’s almost like a black hole is sucking away all my money without any trace of its existence. Now anyone who knows me personally will know that it’s not because I spend money on silly things. Sometimes to get me to spend money on anything is like pulling teeth. This makes it more frustrating, because if I wanted my money to just disappear I might as well have a 56-inch LCD flatscreen TV to show for it, right? Wrong. What I needed was a different approach to debt elimination and money saving. That’s where the snowball comes in. Dave Ramsey’s snowball. Now, I’ll be honest, I’ve only recently learned this snowball approach, but luckily it has been something I’ve been following on my own for the last 6 months.

I’m not going to list all of Dave’s seven baby steps to a money makeover. I’m just going to list the ones that have gotten me on the right track. To learn more about Dave Ramsey and these baby steps, visit these two sites:

Dave Ramsey – The Seven Baby Steps
Success Magazine – Interview with Dave Ramsey

Below I have taken a couple of the steps that have resonated the most with me and have broken them out a little more:

1) Start saving – build up a savings of at least $1,000 that you will only touch for emergency situations. This is something that was really bothering me, because without this I felt very vulnerable to personal economic downturns or unexpected expenses. Having these savings lets me breathe easier at night.

2) Ignore your mortgage / home debt for now. This is big. Especially for the young folks just starting out who have student loans, credit card debt, lines of credit, and a huge mortgage to boot. So, make sure you’re paying your mortgage or saving for your first down payment on a home, but don’t stress about paying your home off too much right now.

3) List all of your other debts from smallest to largest (ignore interest). Mr. Ramsey recognizes that this goes against suggestions to pay off your highest interest debts first, but he has a reason for it.

4) Attack your smallest debt until it’s gone. This is where the snowball really gets rolling. Make sure you are paying all your minimum payments, but aggressively go after your smallest debt until you can wipe it off the books completely.

5) Celebrate your accomplishment. You just paid off that debt that has been hanging over you and taking a portion of your income every month. Now that money is free. Nice work!

6) Re-evaluate and attack the next smallest debt. Get the snowball really rolling.

7) Finish the emergency fund. Once all of your debts (except your mortgage) are paid off, you should have 3 to 6 months of expenses saved up somewhere where you will not be tempted to touch it.

I’ve actually only covered three of Dave’s seven steps. To see the rest of the list please visit the links above. This approach has helped hundreds of people get out of debt. Now let it help you.

Love or hate the snowball? What’s your feedback?

Related Posts:

• What would it take for you to be perfectly happy? (0)
• LTI Profile: Dr. Jill Bolte Taylor (0)
• LTI Recommends: Success Magazine (0)
• Purpose. Legacy. Passion. (0)