g liabilities:

Rich Dad's Financial Statement

Income > Expense

Asset > Liability

A review of my rich dad's financial statement is why the rich get richer. The asset column generates more than enough income to cover expenses, with the balance reinvested into the asset column. The asset column continues to grow and, therefore, the income it produces grows with it.

The result being: The rich get richer!

Why the Rich Get Richer

Income -> Assets -> More Income

Expenses are low, Liabilities are low

The middle class finds itself in a constant state of financial struggle. Their primary- income is through wages, and as their wages increase, so do their taxes. Their expenses tend to increase in equal increments as their wages increase; hence the phrase "the rat race." They treat their home as their primary asset, instead on investing in income-producing assets.

Why the Middle Class Struggle

Income goes up, Expenses go up

Assets do not increase, Liabilities do increase

This pattern of treating your home as an investment and the philosophy that a pay raise means you can buy a larger home or spend more is the foundation of today's debt-ridden society. This process of increased spending throws families into greater debt and into more financial uncertainty, even though they may be advancing in their jobs and receiving pay raises on a regular basis. This is high risk living caused