Cashflow 101 Financial Statement Sheet

This is all the money acquired in an active way (meaning that you actually do/work and trade time for money) and in a passive way (you don't work at all for this money). You will keep track of your salary, your passive income (which can be coming from real estate, businesses...) and portfolio income such as interests, dividends and royalties. Financial Freedom can be reached if you focus on increasing the Passive part of your income!

These are all the money that you have to pay on a monthly basis and in a recurrent manner. It can include all taxes, credit card payments, home mortgages, car payments and other payments (examples could be magazines subscriptions, restaurent outings, food purchases etc...). Financial freedom can be reached if you focus on decreasing your unecessary expenses.

Using the cashflow 101 202 financial spreadsheet, you will become more and more familiar in defining what goes in the asset category. Basically, just remember that an asset is a good that used in a certain manner in the end is bringing you money. In another way of saying it, assets are generating passive income... which is what you want to get out of the rat race. Bank accounts, stocks, real estate, businesses can be defined as assets goods... But be carefull, what seems to be an asset can sometimes be the opposite and generate expenses. In this case, such a good is called a doodad. For example, a house bought for renting can generate a passive income and does qualify as asset but if bought for you, it is not an asset since it takes money out of your pocket in the form of maintenance, taxes, renovation, association fees etc... Similarly a car is not an asset but rather a liability.

The last category you will keep track of during cashflow 101 and 202 games, are the liabilites. A liability is exactly the opposite of what can be an asset. It takes money out of your pocket in the form of expenses. To win the cashflow game, reducing as much as possible your liabilities from th begining is a key to reach financial freedom.

Cashflow Pattern are an interesting concept to learn with the Cashflow 101 Board Game. And it does apply to real life easily. Fill in the cashflow financial spreadsheet with your own real life figures and you will find out where you stand financial what you should do to exit the rat race.