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Parity of conceptsThe rich daddy did not get tired to repeat: itOnly movement of money between the report on profits and losses and balance can precisely specify that is an active, and that it a passiveit.
If you intend to give to your child financial signal to start in a life, remember these words and be not lazy to repeat them again and again. Your child should understand sense, this statement and as it is possible is more often. To repeat it while it will not settle in a head. If your children are not capable to estimate the importance of this statement it is quite possible that they will sometime buy a set of sticks for a golf, will throw them in garage and when will come to make time the financial report for loan reception in bank, they will bring sticks in the column of actives. In the world of my rich daddy the set of sticks for a golf, it in garage, is not considered an active. However in many demands for credit reception it is possible to meet these sticks it I would name their bag with stuff it in the column of actives. Usually them bring in section so-called itpersonal thingsit. With the same success you can rank the boots, wallets, ties, furniture, ware and old tennis rackets as actives it for this reason the majority of people never become rich. They have no concept about a parity between the report on profits and losses and balance.
Look at model of a monetary stream of actives:
Better to say, actives provide inflow of money to a column of incomes. Further we will consider model of a monetary stream of passives:
Better to say, passives call outflow of money from a column of expenses. It is not necessary to be the designer of spaceships to understand a difference between inflow and outflow of money. Trying to fix this basic idea in ours with Mike the heads, the rich daddy repeated often: itActives put money to us in a pocket, and passives take out money from our pocketit. I have understood it at the age of nine years. Many adults will not understand it never.
When I became more senior and have seen, how many adults cling to the guaranteed job, the rich daddy modernised the definition. He began to speak: itIf you lose job actives will feed you, and passives you will eatit. Developing this thought, he spoke also: itthe Majority of my workers cannot leave job because they buy passives which consider as actives, and monthly bills for the maintenance of these passives as which they consider as actives, eat them aliveit. Such formulation is, of course, slightly more difficult, but, sitting on the other hand a table and looking at the people, begging to take them on job or crying at dismissal, I have understood, why so it is important to know a difference between actives and passives. It also was my prompt financial start in a life.
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