Here is a glossary of key terms and concepts to help with your understanding and success.
 
Asset:Something that puts money in your pocket -- with minimum labor.
Automated Business:A business which is run primarily by technology...vs. people.
Advisors:Rich Dad said: "If you want to be rich, who you know is more important that what you know."
Balance Sheet:A 'snapshot' view of your assets and liabilities. 
Bad Debt:Makes you poor: debt for something that buys a liability that takes money out of your pocket.
BI-Triangle:An icon that gives structure to your ideas. It represents the knowledge required to be successful in the B and I quadrants on the right side of the CASHFLOW Quadrant. 
Broker:A licensed facilitator in a transaction (or... someone who is normally "broker" than you).
Capital:Cash or something on an agreed-upon value.
Capital Gain / Capital Loss:The difference between what you bought an investment for and what you sold it for, less improvements.
Cash Flow:Cash coming in (as income) and cash going out (as expenses). It is the direction of cash flow that determines whether something is income, expense, asset or liability. Cash flow tells the financial story
Call Option:Expecting the price of the stock shares to go up.
CASHFLOW Quadrant:The four different types of people who make up the world of business: the employee, the self-employed, the business owner and the investor.
Content:Data and 'how-to' information to be applied within an individual's context.
Context:Mindset and thought process: the framework within which we develop attitudes and perspectives that affect our choices and our actions.
CCR:Cash-on-cash return (See ROI).
Certificate of Deposit:A loan to government and businesses issued through banks with specified maturity dates and interest rates.
Dividend:A distribution of profits of a company to the shareholders.
Doodads:Expenses, often unnecessary or unexpected, that simply take money out of your pocket.
Down Payment:A percentage of the purchase price that an investor pays for an investment. The remainder of the price is then financed through other means.
Earned Income:Income generally derived from a job or some other form of labor. In its most common form, it is income from a paycheck. It is also the highest-taxed income, so it is the hardest income with which to build wealth.
Fast Track:Where the rich play the game of money.
Foreclosure:When a bank or individual takes your property for non-payment of the mortgage
Good Debt:Can make you rich.
Government Savings Bonds:A loan that an individual makes to the government in exchange for payment of interest on that loan.
Income Statement:A form showing your income and expenses over a period of time. Also called a profit and loss statement.
Inflation:An economic situation where consumer prices rise.
Intellectual Property:A broad gamut of intangible assets including patents, trademarks, copyrights, mask works, tradeworks, trade dress, goodwill, reputation and any other information regarding technology and business subjects.
IPO:Initial Public Offering: the first time a company offers shares of stock to the general public.
Leverage:The power of positioning assets for maximum advantage.
Liability:Something that takes money 'out of your pocket'.
License Agreement:An agreement whereby the 'licensor' for an agreed-upon consideration, grants to the 'licensee' certain rights with respect to intellectual property of the licensor.
Limited Partnership:A legal entity set up to hold assets and limits liability for limited partners
Mortgage:If you are financing your real estate, the property you are financing is used as collateral against the amount of money you are financing or borrowing. The mortgage is the security instrument.
Mutual Fund:A variety of stocks, bonds or securities grouped together and managed by a professional investment company and purchased by individual investors by shares. The shares possess no direct ownership value in the various companies.
Market:Where products are bought and sold
Network:Rich Dad said: "The richest people in the world look for and build networks, everyone else looks for work." The greatest idea or product will only be successful if you have a network of people to tell about it and a network of distribution through which to sell it.
OPM:Stands for Other People's Money.
Option:Allows, but does not require, a person to buy or sell shares of stock at a later time at a predetermined price.
Paper Assets:Stocks, bonds, mutual funds, insurance...creating portfolio income.
Passive Income:Income generated with minimal work from your investments such as interest, dividends, real estate rentals or an established network marketing business.
Portfolio Income:Income generally derived from paper assets such as stocks, bonds, mutual funds, etc. Portfolio income is by far the most popular form of investment income, simply because assets are so much easier to manage and maintain than any others.
PPM:Private Placement Memorandum...from the vocabulary of the Fast Track.
Proforma:Future projections of an investment.
Put Option:Expecting the price of stock shares to go down.
Rat Race:Where most of us are trapped, day in and day out, living paycheck to paycheck.
REIT:Real Estate Investment Trust. Similar to a mutual fund, but deal exclusively with real estate.
ROI:Return on Investment. Return on capital, as a percentage, from an investment. For example: An apartment building costs $500,000. You pay $100,000 as a down payment. You have a monthly cash flow is $2,000. Your ROI is $2,000 x 12 months divided by $100,000 or 24%.
Short Sell:A strategy for making profits in a declining market or on the decline of an individual stock.
Shares Split:A corporate action where the number of shares you own increases and the price per share decreases.
Stock Share:A share of stock represents ownership in a corporation. The shareholders (those people owning stock in the company) are the actual owners of the company.
Tax Lien:Property tax lien: a legal claim on a property for unpaid taxes.
1031 Tax-Deferred Exchange:A method of buying and selling real estate that allows you to defer payment of taxes on your capital gains profit. (1031 refers to the U.S. Tax Code section)
Trading Range:The average high and low prices of an investment.
Wealth:The number of days that you can maintain your current standard of living without working.
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