Passive income and the ‘cash flow’ game

Passive income is money that goes into your bank account without you having to “work” for it. It is the dream exit for many people tied to a job, who have to earn a living, sacrificing their time for money.

Sales of your book, CD, or movie are passive income. You work hard to create something at first, then you sell it over and over again with no further input. A basic but powerful concept.

This simple idea is used in Robert by Kiyosaki Game of ‘cash flow’. To increase your passive income until it is more than what you earn working for someone else. Then you can quit your job and keep paying the bills!

Most of us have tried ‘Monopoly’ and either love it or hate it.

Based on buying, selling and renting properties, it is a bit basic compared to ‘Cashflow’, which has three main financial supports. These are also the buying, selling, and renting of property, but include the buying and selling of stocks and the buying and selling of companies.

Like all games, it seems daunting at first, but if you treat it like Monopoly on steroids, you’ll get the idea.

You move around the ‘Rat Race’ circle collecting your regular salary plus any cash flow received from property or business purchases. Every property or business you buy generates cash flow that adds to your salary.

Sometimes a property’s cash flow can be negative, meaning it actually costs you money to maintain it, but you may have an opportunity to sell it or any property at a profit on the open market. This gives you money to invest in larger properties or businesses to increase your passive income.

Just to add a bit of flavor, there’sornaments‘. These are what we all fell in love with. They are toys that lose value over time and simply deplete your money resources, such as televisions, boats, cars, etc. You will not be able to avoid them during the game.

You buy the shares on a card’s turn and the share price is different on similar cards that other players draw. You keep your shares until you or another player draws a card on which your stock has gone up in price. So you sell – simple!

If your passive income exceeds your salary minus expenses, you go on ‘Fast Track’. Here, you have few money worries and you can buy many businesses to further increase your cash flow to win the game. There’s very little to stop you from getting richer in Fast Track and the game becomes a lot simpler, especially if no one else is joining you.

There is an advanced version of the Cashflow game called ‘Cashflow 202’ which involves financial options, short stocks and much more vicious real life dramas where you can lose all your property in one fell swoop. For keen investors only this one.

Enjoy!