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Beyond FIRE, Win the Cashflow Game

Hello. I wanted to make this video for more than a year. And I'm really excited that I at last managed to find the time to do it. It was back in 2007 that I started reading Robert Kiyosaki and it was all good. But the fact is that he had a game. And when I bought that game, which actually is this one over here, it's called cashflow and actually by playing this game, I learned so much more than from all the books together. In a sense, you only get to better understand the books if you play this game after that, I bought also the 202, which was kind of quite more advanced and maybe not that useful and more recently I bought this one, which is like the new edition, which is a bit simplified and a little bit more modern.

So the prices here reflect a little bit more, the reality we have today, when the numbers for this game feel a little bit, you know, outdated, There is also an online version of this game that I'm going to be playing and I will be commenting and hopefully this will give you useful tips both to win this game and also making better financial decisions as the game intended In the processing, that you will see that the FIRE movement that started about twenty years after Kiyosaki's books is actually like one or two chapters of his books, so a small part of what really, somebody needs to be financially independent and free In any case, the more, you know, the better it is. So yeah, we love fire. So let's start the game. Okay. So the first step, as you see, is to, choose your dream, which is not very important just choose whatever.

Now, what you will notice is that you start playing here in this inside part of the game, which is called the rat race. And that's the interesting part. So you are in the rat race which is a fact of reality. And actually you want exit that by becoming financially free, and then you are able to buy your dream or whatever you like. In many cases, I stop playing as soon as I exit the rat race, because at that point, the game becomes somewhat boring. So the first question is repay, borrow or roll and let's start by rolling So you roll the dice. Now you ended up in a yellow box. So you see you are this little helicopter and you end up in the yellow box and this means that you just got a salary. You cannot even see that at this point.

So we roll again and now this is overwhelming, of course, but this is where you get to learn everything there is to learn from this game. So this is actually a summary of your financial condition at any given point. And you can see here, there is income expenses, assets, and liabilities. Now, obviously all this is super-numbery complicated, boring so important things to know. Here's your salary, it's $3,000 because you are a police officer. So what you will figure out is that it doesn't matter, what your job is and how much money you make. This is actually the least important part of the whole game. So sometimes if you have a lower salary job it's easier to exit the rat race than if you are, for example, a doctor, which is intentional. It is one of the points that he tries make.

Then there's the expenses part, and you can do very little about it. So then out of those, you have the total expenses number, right? So all those up there. And then there's a simple calculation of taking actually all your income, which is 3000, removing all your expenses and seeing how much money you get at a given paid day. So payday is when you enter those yellow boxes and you get your salary, you pay the expenses and at the end you're left with this. Now, already this game assumes that every month you have some money set aside, and this is not a reality for many people, actually, the FIRE movement is a lot about reducing your expenses. So you can get these as close to zero as possible. So as much of the money you're making goes to investments, but yeah, for many people, it'll be a struggle in real life to get to a payday where money is actually left for investing at the end of the month, Cash is how much money you have on your wallet or on your savings account.

And now assets it's empty. Liabilities is not empty. You can see there, there are all sorts of loans and debt that you have, which is an American reality and Kiyosaki, doesn't take that out of the equation. Actually, you can go and remove your whole mortgage and, this would actually increase your cash flow every month for $400 by removing 400 from your expenses. But you will see that that is probably the worst thing you could do. This is intentional so all those loans are supposed to be with very low interest rate, and this is reflected on the prices that they map on the expenses stuff. So in contrast to the FIRE ideas where people have a lot of control over their expenses, theoretically, and they will gladly you know, leave their house and leave in the car in order to reduce expenses here the implicit idea is keep your expenses

you are okay as you are, let's start from where you are and see what we can do from there. And I love this. So this is way more inclusive, I think and more approachable for people who already have liabilities. Now you can see that the total expenses is both at this place, but also is over there. And there is a thing here called passive income. So every time you buy things that create cash flows, make investments like buying a house and renting it out you start getting money here, and this is passive income. It means that it comes to you without you having to work. And this is how you exit the rat race, when your expenses are less than your passive income It will take a while before we start buying real assets with real cash flows, actually with the style, that I play

and I believe that it takes you out of the rat race the fastest it's the last thing that we do to actually, start getting assets with cashflows. Let's continue playing and you will understand more. Okay. So, here we have a deal opportunity it's called the small deal. Always you will be picking small when you don't have money and you see it has a house that gives you $220 of cash flow and you have to down pay $2,000. So I don't have $2,000. The cash flow is good for the down payment, but still I told you we go for a fast track so we don't buy things for cashflow right now. All we want is to pump that cash, actually. So actually what we do is we pass, okay. And we continue roll. Okay. So now this is a market.

it tells you some things. If you had land, you could sell all this is noise. You really, don't need to bother you play again, downsized here is a bad thing that happened you have to pay your expenses for a month. So something bad happen. It happens in life it happens in Kiyosaki's, you know, boiler breaks all the time. So you just pay and you move on. Turn skipped. This is also what happens when you downsize again, play again, deal opportunity. I want a small, of course, condo for sale cashflow $140, $4,000 down payment. So this is worse deal than the previous one still, no, I don't care about cashflow right now. I pass, okay. I roll the dice. You can see by the way that the cash goes up, every time I go through a yellow box, because I get my salary.

So actually it doesn't tell you to go quit your job anytime soon, small deal condo, another another building, again, a terrible deal here, $5,000 for a hundred cashflow, but anyway, I pass, give to charity. So this is very important. Yes, you give to charity. And that's interesting because actually what Kiyosaki tries to tell you there is try to mingle, try to be good with your communities and you know this will bring more opportunities. So you pay a small percentage for charity, and then you roll two dice for the next number of rounds, which at very least means that you will get more paychecks right faster. And that's a good thing. So yeah, pay to charity or mingle or spend money to socialize. This is a good thing in Kiyosaki and I think it's a good idea.

So you see, now I can roll two dices and that's exactly what I will do. I get more cash like that deal opportunity, small deal, certificate of deposit how much cash it gives $20. This is very small. Again, I don't care about that. Pass two dice, more money. So now I have almost four thousands of savings. That's good. small deal, okay. Stock. This is important. This is what Kiyosaki tries to do tries to tell you, go look at stocks, right? And so this costs right now, $40 and the rate is for $5 to $30. And what you can do is potentially buy that. Obviously I will not do that because it's very expensive and the range is five to 30 pass again finish your turn, roll again. That was yellow. So so I got my paycheck and then I played again and now I have a baby, so this will increase my expenses by 160 and you will see this

so my total expenses will go up to 2000 a month. And this means that on the payday, I will be getting less money. let me show you, can you see? So it's $2,000 on the liabilities side. and I get less than a thousand every month on the paydays. So this is a bad thing financially, but a happy thing, I guess. So yeah, real life ok roll. Okay. More money Deal opportunities, small deal, mutual fund cash flow zero. This is terrible. All the mutual funds are terrible. And this means that there are many deals out there in the real market that you really shouldn't bother because they're terrible They will tell you they're more secure to have your cash on this or that deposit. Like just ask around. And if they give you less than I don't know, 5% interest, they're probably terrible instruments and you shouldn't bother small deal.

Start the company part time. This interesting zero cost flow. Sometimes the market, somebody buys a small company and you make money out of it. But I will pass because this is not how I play this game and I think it slows you down. If you buy small companies or whatever it just wastes money, you don't bother market. Somebody would buy a house if you had one, you don't have move on. Roll opportunity small. Okay So here's a stock. It costs 30. and the rate if from 5 to 40, I pass, this is a bad time to buy. The stock is expensive. Again, if we had some type of real estate, here's a buyer I skip. So you see, I don't do anything more than saying no. And with my job, accumulating cash to have to buy other stuff when the time comes small okay again house pass okay roll okay salary

You see this called a doodad and so I go to a concert I pay 180. Okay. I will pay, move on small deal. Okay. Again, a mutual fund mutual funds don't give any money ever pass widget company buyer. If I had one of those, I would make some money right now. I don't have that again. I don't bother with those. I roll again. Small deal. Okay. Land I pass tax audit. I pay $350. Okay. Paying let's continue. Roll. Okay. Small deal again. Here is one stock that goes from 10 to 30. The price now is 30. I pass roll, small deal. Friend needs cash quick. So many people will ask for money. The message he tries to send you there is don't give them okay. Just, yeah. The friend should find his own money or her money pass.

So again, something bad happens. I pay $100. And so this is a message, right? So every time you go through the circle, at some point, these are years of your life. And what you do is just go to work, come back have some savings but if you don't find a good deal, you just don't spend your time you know, buying crap. You just wait until the time is relatively right in the market and you will see what I mean, hopefully really soon and so next. Okay. Small deal. Okay. So here is a stock that goes from 5 to $40 and right now costs 10. Right? So that means that this potential could go up to four times and that's kind of good, kind of good, but, but not excellent. Okay. Let's pass small deal here we are.

So look at this now, right? This stock trades between $5 and $40 and the cost right now is $1. So guess what I will do right now, not only I will buy now, this is where people get it really wrong. They, they go like, here's the stock. Let's put $300 into it. Right? So you found an amazing deal and you will go and you will think like, oh, I'm not so sure. You know what I should be doing with stocks. Stocks is complicated. Like, but see this simple thing. So this is a company that for some weird reason is very cheap right now probably it will revert to its previous price. Maybe why? Like if I buy $300, it goes like 40 times up so this $300 will become $12,000. Will it solve any of my problems? Will it help me go out of the race?

Maybe you don't know it yet because I haven't showed you the big deals, but no, I will not be able to buy a big deal with $12,000. So when you find a fantastic deal like that, the answer is go buy as much as you can. So here I am. I give all my money and I buy this stock now, small, MYT4U for you another stock, 5 to 30, this is a good one to buy. Okay. How much money do I have? 2,400. So just take almost all the money. Okay. To be honest now I'm betting in two stocks at the same time. That's not kind of very clever, but yeah, it might help sometimes we will see how small deal. So something about a house I pass, go to casino, a waste of money, small deal. Okay so this is okay for you right now. Look at this. The cost is $40. I sell look how much money I made 480 $480,000. Let's click on repay to see the balance. you see this half a million cash. So at this point I stop the first phase of the game, which is value appreciation. So right now I have enough money, to exit the rat race. this is super important. I can go buy pretty much any big deal I want. and you will see that in the next step. Right. so, okay. Let's play again.

Downsize who cares with all this money? Nobody cares at all. So now it's the first time I click on a big deal. Okay. And you can see here's something that you down pay $200,000, right? And then you have a cashflow of $11,000. So what does this say? I get this apartment complex for sale 60 units. I buy them all. I rent them out. Of course it will cost me a down payment of $200,000 that I have out of my stocks. And then the whole building block costs 1.2 million, but the down payment is 200. And then the rest comes from the bank. So theoretically here you have a business plan or something and you go you convince the bank to give you the money you buy So this is the idea of big deals they are cash flow generating with serious amounts of cashflow If I was trying to buy small condo here and there and get $100 of cash flow and $200 all the time, I would waste lots of time.

I would be all the time broke. It would be a bad idea, but here with one big deal, I make, 11,000 of positive cash flow and trust me if it wasn't like that, probably in two, three deals, big deals. If this wasn't a good, big deal, I would get one good, big deal. And I would be out of the rat race so right now I buy this congratulations you're out of the rat race. Of course I am. And not only that, but you can see the pay day right now I get $11,000 a month with my job. If I quit my job at that point, I will be getting $9,000 a month on top of my expenses, right? As an ex-police officer and still I have. and still here, you have like $300,000 to do whatever.

And so now the idea is that since you mastered the rat race idea and you know how to create cashflow for yourself, you go, you do this again and again, and you go on the outer game, which is like the rich life game and at that point you get like tons of money on every yellow box. So I think it's 10X. So instead of 11,000, you get like 110,000 and then you go and buy fun companies and you see, like, you don't even think about it. You just buy, okay, you roll and then you buy some more. So the idea is that as you buy stuff, you either buy your dream, which is what you said at the beginning, doesn't really matter, but also if you buy a few businesses and you increase your cashflow a little bit you also exit and win the game right now.

I'm halfway there. So let's buy some more stuff you see, I don't even need to see the deal, whatever it is but I won the game. That was it. So you can see here, although this game has the FIRE primitives it's beyond that. So the whole deal of FIRE is, reduce your expenses, which is a small part of cashflow. Of course, that's by no means bad advice. It's very good advice, but you can see in cashflow finding the right deal is way more important and it's way less important to actually act all the time. So you keep money, but you don't spend them on stupid stuff. You just try to find good deals. There are two distinct phases. The first phase is actually get your savings and pump them with some good, small deal, right? That is actually capital gains is value appreciation.

again it's a business activity and then it's generate cash flow. So then do something big, like become a partner on some big company, and then you get lots of cashflow and you get out of the rat race, so now you will ask like is this real life? Can this happen? yeah, actually I had to pass probably 20 deals before I find a good one. Right? and this is you have to be in the market. you have to be, have, the ability to evaluate is this a good deal or a bad deal. And also you have to have enough experience to say, historically, this is a bad deal. Or historically this is a bad price for that stock or a good price for that stock, right? Or whatever else you choose. You have to master an asset class to know when something is a good deal or a bad deal, and then exploit that asset class for, value appreciation, right?

So that's the first step. That's the most important step now about reducing expenses, all this extreme frugality cashflow doesn't go there because it's not an option for many people, many people cannot decrease their expenses at any given point.

Also one interesting thing with FIRE is that for example, you have many people who are students and after they're students, they go like aha I can actually move back to my parents' house and then I will have zero expenses. So I am financially independent if I have a part-time job. And actually this is a little bit fun for me because I'm from Greece and the university is there for free. So almost every person who is 18 or 20 or 25 years old is a university student at least most of them and they live in their parents' houses and maybe it's a rent that they have from some grandparent or something or they work part-time somewhere. So theoretically, every university student is financially independent, according to FIRE. But in Greece, we don't call students financially independent. We just tell them, you didn't begin your life yet. Right? We tell them, oh that's a cool phase of your life and then you are going to have a career and then you will have exactly those problems that cash flow shows.

So for me, those are the tricky parts of again, it might be misinterpretation of FIRE but what is emphasized are the quick shortcuts and not what cash flow emphasizes, which is a lot of knowing an asset class and going for value appreciation and then for cash flow, because the expenses will be there, you want to live your life, And you want to have a passive income to support that this is exactly what cash flow is all about. So I hope you find this super useful and I have to tell you that this game changed my life back then in 2007

2009 I quit my job and the rest is history and it was to a great extent because of the lessons I learned from this game 100% I can attribute it on that. So go play this game it's for free. learn ask questions and I hope you learn many things and also send me a message and tell me if you find it useful. Thanks for watching.

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