Page 110 - Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money

get worse and bigger. My suggestion is to look at the problem of bad debt
as an opportunity to learn and grow smarter.

After one of my businesses failed, I lost nearly a million dollars. After
selling off personal and company assets, I still owed about $400,000. To
solve this bad debt problem, Kim and I came up with a plan to eliminate all
of it. Once again, instead of cutting back, we instructed Betty the

Bookkeeper to keep us on track and we used the problem to get richer,
rather than poorer. In other words, we got richer while paying off all that
debt. We continued to tithe, save, and invest, all while aggressively paying
off all our bad debt.

(If you would like to know more about how Kim and I got out of bad
debt, we created a CD called How We Got Out of Bad Debt, and a small
accompanying workbook to guide those who are in bad debt. You can order
it from our website, Richdad.com, for a nominal price plus shipping.)

Looking back at our mountains of bad debt, I am glad Kim and I grew
smarter at budgeting through our problem-solving. While I never want to be
that much in debt again, I am glad we learned from and solved the problem.
When Kim and I were short of money, we used that problem as a

resource to make more money. Rather than live below our means, or borrow
more bad money to pay for bad debt, we used our problems as resources to
become resourceful, and as opportunities to learn and become richer.

Keep This in Mind

Financial IQ #3: budgeting your money, like financial IQ #2, is measured in
percentages, the percentage of income that reaches your asset column.
If taking 30 percent of your income is too hard, then start with 3 percent.
For example, if you earn $1,000, instead of allocating $300, or 30 percent,

to your asset column, then direct 3 percent, or $30, towards your asset
column. If this 3 percent makes life harder, that’s good. A hard life is good
if it makes you more resourceful.
The higher percentage you direct to your asset column, the higher your

financial IQ #3. Today, Kim and I direct approximately 80 percent of our
income directly into the asset column and do our best to survive on 20
percent. Also, we never say “we cannot afford it” and we refuse to live