If you are currently interesting in growing your wealth without investing your money or time in the methods shown in my article 'Passive Income and You', it is best to save your money. This can be done through savings!

Savings Tax

When you are earning a basic form of income, you would normally be taxed by the government in the form of income tax. This is unavoidable as part of your income is eaten up by the Big Brother. So, in addition to that taxation, in your own private records you should add a separate column for your "Savings Tax". Set a percentage to tax yourself after you have taken off your expenses and your "forced" taxes.

If you tax yourself 10% of your salary as "Savings Tax" with an income of $1,000 a month, you are saving $100 a month. Over a year, you would have saved $1,200. If we were a bit more generous and say you have $10,000 a month, you would be saving at least $12,000 a year. You may go over Fixed Deposits for a low-risk interest rate, allowing a small amount of passive income per annum. 

A Compounded Dollar

The compounded dollar is a saving method which is by having a small compounding saving throughout the year on a weekly basis. For example, you could save $1 on Week 1 and $52 on Week 52. This could be done in reverse depending on your spending and saving habits. This means that if you are able to afford saving $52 at the start of the year, so be it. Otherwise, you can start small and grow it. In total, you would save $1,378 per annum. It is simple maths  and you don't have to go the bank unless you are going to put your lump sum into the bank.

Simple Saving Method

This is less complicated version of "A Compounded Dollar", save a flat rate of your money in a bin. If you save even a dollar a day, you save a small $365 a year. However, if you decide to save $5 a day, you will save $1,825 a year.

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The best method to saving yourself is not to have a clever way of saving your salary though. The smart way would be to make sure you don't spend unnecessarily. Sounds basic? Well, you would be surprised by how often you spend money on things that are pointless or unnecessary.

Start a shopping list




Before you are about to go shopping, write down exactly what you want or need. Supermarkets are organised in a certain way to make sure that you are trapped inside, buying things you never thought you wanted or needed. If you have a set goal of what you want to purchase, buy nothing else. Don't be "Oh, I think I may need this". Be like this, "This is what I have came for".

Be wary of sales


Personally, I have fallen prey to amazing sales. I would end up buying more of something I don't need or never thought I wanted. What will I do with a brand of chips I am not especially fond of after buying 10 bags because it was 50% off. Keep in mind that each time you buy something from a sale, you are still spending. For every $50 you spend, you feel that you are saving $100 but in actuality, you are still spending $50.

Cut up the cards



I am not fond of liabilities. One of the biggest ways to rack up debts are credit cards. You will never need more than two. One for your personal usage and one for absolute emergencies. The one you allocate for personal usage should also only be used when you are making a large, necessary purchase.

Deal with Cash



Whenever you are buying something, deal with cash. Avoid using cards whether credit or debit. Whenever you have cash on hand, you will likely spend less. This is because when you are primarily using a card, your cash becomes digital and the illusion of infinite money comes in. However, if your cash is in your wallet, it becomes a finite resource that you can use. 

Avoid depreciating assets



You see that hot million dollar car that runs from 0-200 in a second? You know, that one car that costs a winning lotto jackpot? Well, odds are, you don't need it. And if you don't get it, you are better off in the long run. A car is an example of a depreciating asset, its value goes down as it ages. Unless it is a highly sought after vintage car, you will never get your money's worth back. Another example of a depreciating asset is tech. If you don't need a new phone, your current one works fine. Shelling out another thousand dollars over some minor RAM improvements will never be worth it. Even trading in your current phone won't net you much of a discount.

Don't gamble in games you can't win



Whenever I walk around the shop lots a few roads away from my house, I would see that there are people lined up in the lottery center, hoping for their big break. I was honestly surprised that this information would actually be necessary but apparently it is. GOING TO THE LOTTERY WON'T MAKE YOU RICH! It is as silly as burning up your money. The casino won't work either unless you are highly skilled and you'd most likely get kicked out if you win too much. 




If you want to gamble, don't bet on horses. Wanna know the best odds? Investments. If you want to play with your money, take it to the stock market and ,with prior research, go bet which stocks will go up. Odds are, you will have a higher rate of return and if you are on site buying and selling, as a participant, you should be able to appreciate more of a high than just being a spectator. 

Fuel bills



If you are living in a country with a functioning public transport and expensive petrol, stave off on the fuel gauge. Do the math on your own as this differs between countries but just think about it! Will it be cheaper for you to take the train or drive? If it is a matter about being late, then take off a little earlier. 

Phone Bills



If you are still paying for your phone bills separately from everything else, you need to know that there is an alternative. Many companies offer Internet services as part of their package and they can use VoIP to let you call people as part of your internet plan. Personally, I done away with my land line since no one calls it anyway. If you need someone to call your household, it is better off that they know your handphone number so they can call you that way or even use whatsapp to call you. The internet is truly a magical place.

Decide between NEED and WANT



Whenever you want to buy something, do you need it? Or do you just want it? If you have expendable income that you don't mind shelling out then go ahead, satisfy your wants. However, if you are desperate to save, knowing the difference between needing and wanting will do you some good. 

Therefore, I wish you the best with your journey to save yourself from financial debt. If you want more tips or would like to share tips of your own. Kindly leave a comment in the comment section below.

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Sean Wang

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Robert Kiyosaki released an audio book called Rich Dad, Poor Dad : The Cashflow Quadrant to allow people to be aware of their own sources of income and varying forms of investment. In the end, hopefully to advise you on the dos and don'ts on the path to being financially free. Keep in mind that the term financially free is used here, not necessarily rich. However, this guide seems to promise that you can be rich too. Keep in mind that this blog post is merely a summary of what I absorbed form the book. 

First, let's go through the quadrant, starting with the E (Employee) section. This is where most of us would probably be at after our college degree, working, struggling to make ends meet. If you are in this part of the quadrant, you are relying on a firm to provide money to you. This is most likely the hardest way to be rich as it is not your bosses' duty to make you rich and your money will get eaten up by taxes. The key here is to work smart not hard. If you climb the corporate ladder, if you do not participate in the other parts of this quadrant, you will also be climbing the tax bracket ladder. An E would be characterised by the desire for security. They tend to avoid taking risks in order to hopefully retire when they can't move any more.

Next, we have the S (Self Employed) section. This is where most doctors and lawyers who go into private practice fit. Self employed means that you are your own boss. Every penny you make, odds are, you will be there to make it yourself. This section is often for the perfectionist who feels that their work alone is satisfactory and no one else can do it. Sometimes, an S would not even train people because they may rise as competition. Being an S is a high risk but high reward venture. It is also extremely exhausting since it is mainly you doing all the work. Clever Ss would sell off their businesses or private practices before they burn out but most of the time, they would either work themselves to death or watch their own business burn to the ground. 

The two sections on the left side of the quadrants use time as the true currency. It is about the amount of time you put into your job and the returns associated. If you don't put in the time, you won't make the money. If you are a youth and you are reading this, you want to get rich quick, don't you? If so, being simply an E or an S will not be the fastest track you desire.

What you seek is the residual income half, the right side of the Cashflow Quadrant, B (Business Owner)  and I (Investor) sections respectively. Let's start with the B section. Here, you start your own business but that is not it. You own or create the business system itself. Instead of dealing with time, you deal more with people and these people work for you. As a business owner, you do not even have to be directly involved in the processes of the business after initial implementation as you can hire a business manager to deal with that. Bs tend to have the mindset of "If I can't do it, why don't I hire someone to do it for me and do it better".  The challenge here is that you have to either buy a business system or come up with your own and capital is an issue. The good thing is that you can own multiple businesses and let all the businesses build passive income for you. 

Note that I said buy your business system. This means that you have that option if you have the money lying around to buy, let's say, a franchise. You purchase their business model and own the rights to it in your area. However, since it isn't your own model, you have to follow whatever the higher ups do. If you don't, your business would fail. Buying a franchise is seen as one of the better ways of entering the B section because through using a tried and true business system, you can learn how to create one of your own. 

A Business Owner must have the mindset that they are willing to learn and they must learn to be humble. This is because if you choose the B section, you will be working with a lot of people and these people are often way more qualified than you can over hope to be. So, if there is a group consensus and it seems logical, you will have to accept it because if you want things to go your way only, you are reverting to the S mentality. 

Now, let us begin with the I (Investor) section. An I is when your money works for you and you practically don't really have to life a finger for the cashflow to come in. Kiyosaki emphasised the 7 levels of investors to explain to people how to self identify and set goald. This blog  summarises the topic rather well so I won't go into detail. But the gist of it is that if you want to be an investor you have to start with long term investments and learn the market from there. It could be fixed deposits and the like. Just ensure that you have a passive income from there. 

A great thing to invest in is property, keep in mind that you must own the said property, avoid unnecessary debts, unless you are absolutely sure that you will still be making a good passive turnover with rent. Allow leeway for a price change in the event of a fluctuating market, while maintaining a good profit. If the market flourishes, then you can increase prices. 

Next, you must understand that if a deal is too good to be true then that is often the case. If you see a property deal that is unusually cheap, learn the motives of the seller. Maybe there is a mall being closed down or there is a freeway being built right in front of the house that would devalue the property. Research is pivotal in all aspects of your financial journey.

So, the keyword for the B and I sections is passive income. If you can earn passive income that is more than your expenses and are able to maintain that income, you will probably survive barring a major change in the market. 

The thing about the Cashflow Quadrant is that you are not limited to just one section and especially not just one section at a time. Kiyosaki gave an interesting example of a doctor. The doctor may work in a general hospital (making him an E) while having private clients (making him an S), he may own a lab or a clinic where he hires other doctors to work for him (making him a B) and he may own many properties and stock (making him an I). So, you are not limited to either aspect of the quadrant, it is entirely up to you when it comes to how you want your income to arrive.

 Kiyosaki introduced a different concept of wealth that was rather foreign to me. He stated that wealth is not a measurement of money but how long you can survive without income. For example, if you need $1000 to survive a month and you have $10k in your bank account, you are able to survive for 10 months. If you can survive for the rest of your expected lifetime, then you are truly wealthy. 

But I think one of the most important lessons that Robert Kiyosaki taught was that a journey of a thousand miles begins with a single baby step. Because it is  not just a single step like the traditional saying, it is a baby step. Just like in the human life cycle, you have to crawl first before you get to walk. If your legs aren't fully developed and you intend on running, you will fall and hurt yourself. So, to get into the financial game and let money talk, you have to take the first step but at the same time be patient with yourself and the market as you slowly build your financial empire. 

Therefore, good luck in your wishes to be wealthy and happy. Because, even if the love of money is the root of all evil, you are still going to be freaking rich and make your family happy. 

Purchase Robert Kiyosaki's Rich Dad Poor Dad: Cashflow Quadrant on Amazon 

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Sean Wang

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