Seven years ago, I had the opportunity to travel and speak alongside Robert Kiyosaki, the author of the world’s best-selling personal finance book, “Rich Dad, Poor Dad.” Together, we travelled to countries like Malaysia, the Philippines, Thailand, and Vietnam, speaking to crowds of thousands of people. Today, I reflect on the valuable advice Kiyosaki gave and how it still rings true to achieve financial freedom in today’s challenging economic environment.
One of Kiyosaki’s most important pieces of advice is that it is much better to increase your income than to cut your expenses. I found that most successful people have developed three different types of income to achieve financial freedom: proactive income, investive income, and passive income.
Proactive income is income made through your personal competence or expertise. Essentially, you make money by developing a high-income skill and trading it for a salary or fee. Investive income is income made through the financial markets, like stocks, bonds, and forex. Essentially, you make money through interest, yield, and capital gains. Passive income is income generated through a business (profits, trade sale) or royalties and licensing (like writing a book or leasing intellectual property).
To achieve financial freedom, you must develop all three types of income.
I call this the P.I.P. Model for wealth creation:
- ✅ Proactive Income (You make money)
- ✅ Investive Income (Money makes money)
- ✅ Passive Income (System makes money)
To achieve financial freedom, it is essential to focus on increasing your income rather than cutting your expenses. By developing all three types of income – proactive, investive, and passive – you can build a solid foundation for financial success. So, watch out for more details on the P.I.P. Movement soon!
