We focus on earning more money with the belief that more money aids to knock out our problems. But if we do not have the skill to manage cash flow then higher-earning also will not be able to help us, even it can work as a curse for us. Many a time, with more money, people will increase their spending and take higher debt. This will create a problem bigger compared to what it was earlier. We are the CEO of our life so that we have to think in a way to improve our position.
Our liability is an asset for someone and we are working to make them rich rather than to make ourselves. We need to remember that good debt is debt someone else paid for us. Bad debt is a debt that we paid with our sweat and blood.
We need to learn to spend within our means rather than spending more on liabilities, we should work on increasing our means (assets).
We can reduce personal debt by not using multiple credit cards, focusing on earning a few amounts extra every month, try to repay slowly one by one debt. As we get debt-free then we should start investing the same amount which we paid every month on debt. This process will help us to grow steadily.
Investment always helps us to become financially free while debt drag down our dream.
Read for more detail: Rich Dad’s Cashflow Quadrant: Guide to Financial Freedom