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How to play Cashflow 101



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all right so here is an instructional

video on how to play the cashflow 101

board game by Robert Kiyosaki so first

of all there's three versions of this

game there is cashflow 101 cashflow 202

which is the more advanced version and

then there is a new version that is just

simply called cashflow personally I

prefer the older versions of cashflow

101 and cashflow 202

so the game as I mentioned is created by

Robert Kiyosaki he's the author of Rich

Dad Poor Dad

and the goal of the game is to help you

learn how to invest and create passive

income there's actually two different

places that you are playing this game

the first place that you're playing is

on the board that you see here the

second place that you participate in the

game is what's called an income

statement and balance sheet which we'll

talk more about in a little while so

those are the two different parts you'll

see some of the pieces of the game here

so you'll notice every single player has

a couple different things every single

player has a game piece which is a wrap

like this and a piece of cheese alright

so the very first thing that you do when

you're playing the game is you take your

cheese and you put it on one of the

dreams which is any of the pink squares

on the outside and you can read through

them there's protein box seats there's

by a forest mini farm in the city cruise

the Mediterranean just whatever dream

that you would like to select and then

you price your rat at the starting point

these right here you're going to use

later on in the game but you can discard

them for now so the game is played in

two distinct areas the first area here

is called the rat race and this

represents life with the job and the

second area is called the fast track and

that's the outside circle here the goal

of the

the first part of the game is to get out

of the rat race to quit your job in the

way that you do that is by having more

passive income than what you have for

expenses once you do that you don't need

a job anymore

the second goal or part of the game is

on the fast track and when you're on the

fast track that's where you want to land

on and buy your dream there's a

secondary way to win as well however the

main goal here is to land on and buy

your dream so essentially your two goals

in the game number one is to create

enough passive income to quit your job

and then number two pursue and buy your

dream so that's the super basic version

of how to play the game I'm going to

give you a little bit more of a kind of

example here now I mentioned before that

the goals of the game was to exit the

rat race and purchase your dream one

more important piece is that you want to

do that within the time limit every time

you play the cash flow game my

recommendation is just set a timer for

either an hour and a half or for two

hours but do not exceed two hours if you

can not get out of the rat race within

two hours that means you don't

understand the game yet so you always

want to play with a time limit and

essentially you're racing yourself

versus the clock so I'm going to go and

explain a couple things here on the

board so once you get served in the game

you roll the dice and you move clockwise

so if you rolled and you land it on or

past paycheck then you will receive what

your paycheck is your paycheck comes

from the income statement and balance

sheet so the very first thing you do

when you start the game is you take one

of these profession cards and you take

the information from that card and you

move it over onto your income statement

and balance sheet which looks like this

so it looks exactly the same we'll give

you a bit of more details here on on

this in a minute but essentially this is

the income statement and balance sheet

you just want to move all of your

information on to this you want to make

sure that you use pencil because you're

going to be erasing quite often so what

you'll notice on this income statement

give you an example here so if you

notice on here we've got income which is

our salary

we also would have any income from any

assets like real estate or things like

that that we have then we see all of our

expenses underneath that so we've got

the income column we've got the expense

column we also have the asset column and

the liability column every single

liability right here will have anacs--

and corresponding expense so if you paid

off the $31,000 mortgage you're $300 per

month mortgage payment would go away if

you paid off your thousand dollar retail

debt then your $50 a month retail

payment would go away okay so basically

all of your income together equals this

number right here all of your expenses

together equals this number right here

your income minus your expenses is your

monthly cash flow it's how much money

you have left at the end of each month

so when you land on or pass your

paycheck this is the amount of money

that you're going to take from the bank

in cash so that is the paycheck square

you'll also notice that there are red

doodad squares the red dudettes squares

are things that you can purchase so this

one says play your lucky lottery number

lose $100 now the doodad squares they

are not optional meaning that when you

land on it you don't have a choice to

buy it or or not buy it you have to make

the purchase if you don't have enough

money you can take a loan from the bank

at any time and I want to explain that a

little bit later in this video so that's

the doodad section there's also a

charity spot and a baby spot and the

downside spot those all have

instructions right

on the square the majority of what you

will be doing in the game is small deals

big deals and market cards so if you

land on one of the green squares like

this it will give you the choice to

choose a big deal or a small deal and

I'm going to give some more details of

how to actually purchase one of these

deals and put it into the balance sheet

but when you end on this square you can

either choose a big deal or a small deal

and essentially generally speaking big

deals cost $5,000 or more and small

deals are $5,000 or less so if you have

more than $5,000 in front of you you

might want to consider a big deal if you

have less you should probably be getting

a small deal so an example is a house

for sale 3-2 rental house suddenly

available due to real estate closing or

well-maintained older property while

with existing tenant users card yourself

result another player 38% roi may sell

for 65,000 to 135,000 cost 65,000 down

pay 5,000 mortgage 60,000 cash flow 160

so we're going to use this as an example

in just a moment here I'll show you how

to actually fill that out into your form

but whenever you land on a card like

this you want to read the card out to

the entire group read it out loud and

then decide whether you'd like to

purchase this card or not so that is

something that you'll see inside of the

small deals and big deals the market

cards on the other hand these cards will

affect everyone in the game so this one

says buyer offers 30,000 per unit for

all units at any combination of duplexes

for plexus or 8 plexus everyone may sell

so not just the person who threw the

card this represents what the market is

doing meaning if you have a duplex right

now that you bought for $40,000

you can now sell it for 60,000 dollars

because it's a duplex that means there's

two units and they're 30 thousand

dollars each so 30,000 plus 30,000 is

60,000 which would be the selling price

if you want to sell well you get rid of

the cash flow you receive from the

property

and you pay down whatever you all left

on the mortgage so that is the market

cards I'm going to show you how to fill

these out on the income statement and

balance sheet all right so here we are

with the income statement and balance

sheet income statement is just the

income and expenses balance sheet is

assets and liabilities and then this

over here is actually called the

statement of cash flow so essentially

you're going to start the game by taking

one of these profession cards this one's

a mechanic's and we're just going to

transfer all the information over so

we'll type the profession your name the

auditor is the person to your right and

then we'll just transfer all this

information over so right now we have a

salary of $2,000 so all we don't have

any other income paid start the game so

all of the income types together added

up equals your total income which is

$2,000 over here we have our expenses so

we'll just transfer this over 360 360 60

50 and 450 and all these add up together

to be 1208

our total income minus our total

expenses is our monthly cash flow this

is what we have left at the end of each

month which is 720 dollars this is also

the number that you're going to get

every time you land on or pass paycheck

I'm going to write in our savings as

soon as you start the game you're going

to actually erase this number and take

this in cash and then we have our

liabilities so we've got a mortgage of

$3,100 you might notice that this

mortgage has an existing payment of $300

per month

same thing with our car loan credit card

debt and retailed it now if I was to pay

off this retail debt and pay off the

full $1,000

I would pay $1,000 to the bank and then

I would erase my retail payment of $50

that would become 0 that would mean my

expenses would go

down by $50 and that when I go income

minus expenses my monthly cash flow

actually goes up by $50 so I'm keeping

more money every single month so the

goal of the game of course is to get

your passive income to become greater

than your expenses one way to do that is

to increase your passive income another

way to do that or to assist in that is

by decreasing your expenses by paying

off liabilities over here so I'm going

to give you a couple of different

examples of how that you would do this

so we're going to start with this card

right here so this card of the house for

sale and I'm going to show you how you

would enter this all of the different

numbers on here have somewhere to go on

the income statement so we're going to

start off by going down to the bottom

here and we're going to type in

3-bedroom 2bath which is what it says

right here home our down payment is

going to be $5,000 and we're going to

say that I had that 5,000 cash and I

paid to the bank our cost our total cost

is going to be $65,000 so through vision

2bath house our asset is the $5,000 down

payment and the $65,000 cost the

liability is the mortgage that we owe so

we're to write down 3-bedroom 2bath and

the mortgage over here is 60,000 okay

from there I'm going to come up to the

top and I'm going to write 3-bedroom

2bath and the cash flow here is a

hundred and sixty dollars and so what

the hundred sixty dollars represents

what that means is we've got this

mortgage payment here of sixty thousand

dollars some people say well what about

the mortgage payment what this card is

saying is that we're renting this house

out and the tenants of the house are

paying the whatever the monthly payment

is on the mortgage and all the bills and

after that we're left with one hundred

and sixty dollars meaning that the rent

covers all of our expenses plus one

hundred and sixty dollars

so we're going to write plus 160 dollars

right here our total income now goes up

by 160 dollars and our monthly cash flow

goes up by 160 dollars so now every time

we pass or land on paycheck we're going

to get 930 dollars our monthly cash flow

has gone up our passive income is now

160 dollars once this number you can see

their expenses

we have finished the first part of the

game so that's the first card I'm going

to show you a second card here and this

one is my tea for you electronics I'm

going to show you two different things

on this card the first is how to buy a

stock and the second is how to take a

loan I mentioned earlier you can take a

loan from the bank at any time you must

take loans in thousand dollar increments

and your interest payment is 10% per

month which is 120 percent per year so

let's say I'm going to take $1,000 loan

over here I'll put that into the bottom

my loan payment now becomes 110 percent

of my thousand so for every thousand

dollars you borrow it's $100 per month

my total expenses now go up which means

my monthly cash flow goes down alright

so I have now successfully taken a loan

now we're going to say that I'm taking

that thousand dollars and I'm using it

to buy this stock so the stock is my t4u

number of shares well it's 10 dollars

per share and I've just spent $1,000

that means I have a hundred shares at

$10 each and that's it so now these

share stay in my asset column if I had

cash I wouldn't have had to take this

loan I would have just used cash to buy

these but we're assuming that I took

money to borrow from these now how do

you make money from stocks because it

says right on the car

that the ROI is 0% and what that means

is I'm not getting a monthly dividend

from this so I'm buying it low hoping to

sell it high so let's say we're rolling

over playing a little bit longer and

another card comes up this time it says

my tea for you booming market leads to

record share price of this home

electronic seller only you may buy

everyone may sell so what that means is

if I'm an owner of this stock which I am

I can now sell it for the price of $40

per share even if I'm not the person who

pulled this card so only the person who

pulled this card can buy at 40 but

anyone at the table can sell so I'm

going to say that I want to sell all of

my shares I could have sold the portion

my name is how all of them so a hundred

shares at $40 each means that I get

$4,000 from the bank in the bank I

erased these shares essentially the bank

is buying the shares from me and now I

have $4,000 if I wanted to I could use

some of that money to pay off my loan

which would in turn erase my payment

this would go down and this would go up

okay

so now I've got $4,000 in my pocket

how do you sell your houses well your

houses actually get sold through the

market cards these blue ones so this one

here says actually this is a bad example

but some of them will say they'll have a

different amount so normally it would

say you can sell this for $50,000 you

can sell it for $100,000 so let's say a

card came up and said you could sell it

for $100,000 if that's the case what I

would do is I would say yes I'm going to

sell this and I would take $100,000

minus whatever my mortgage is so I still

owe $60,000 on the mortgage and this

number never changes it always stays the

same we're assuming that you're paying

only interest on these loans that's not

going down every month okay so I would

take $100,000 I would - this 60,000

which means I would take $40,000 profit

from the bank so I would go ahead and

get that money from the bank

it also means that I need to erase

everything to do with this home because

I've now sold it so I'll lose my hundred

and sixty dollars over here so this one

sixty goes away it's now zero this one

sixty now goes away is now zero so this

is back to two thousand and then this

goes down by one hundred and sixty so

should be six seventy I believe and I've

now completed that transaction on the

other hand sometimes market cards are

bad so I could have got something like

this one that says hey inflation goes to

10% and interest rates climb to 20% you

just lost your three-bedroom two-bath

house and you get nothing for it okay so

market currents can go either way

sometimes are positive sometimes they're

negative the bottom line is this game is

going to teach you to grow your

financial intelligence to allow you to

practice these things a few times over

and most importantly get used to this

income statement and balance sheet and

start to control your your emotions when

it comes to money so that is the cash

flow game in a nutshell it's a quick

version here of what to do to get

yourself started and to get playing and

I really recommend that you play this

game at least once a month

Kiyosaki challenges you to play once a

month for a year and it's a really great

idea to change some of your thinking

around money and mostly to change your

habits it's not about there's some

lessons you need to learn it's that

there's habits that you need to create

and change and for most of us I mean I

was taught to go to school get good

grades save money you know hopefully

retire by the time was 65 and that was

you know put into my head over and over

and over for 18 years so it's not just

going to be that I read one book and all

the sudden 18 years of programming is

gone it takes time to develop new habits

and that's what this game is really

phenomenal at so underneath this video

there's a quick link if you'd like some

further tips about how to win the game

how to get out of the rat race faster

I've provided some tips there

and they apply to the game and a lot of

them apply as well to real life so I'll

go ahead and you can enter your email by

clicking on that and I'll be happy to

send you some additional videos outside

of that and really hope that this

tutorial has been helpful for you and

most of all I hope that you really enjoy

the game and play it on a consistent

basis so thanks a lot for watching and

I'll see you soon