Economic ConceptsHis biggest goal is to educate people and to help them understand basic economic concepts. Here are some to learn: Networth The sum of all of your investments, capital, cash and property minus your debts. Networth fluctuates as the economy does and is not a good measure of your worth. If you buy a house for $300,000 but you can't sell it for that your networth is worthless. Cash Flow Money coming into your wallet each month is the true sign of wealth. It may fluctuate with the economy but having multiple streams of income will balance out the losses of income. Capital Gains Kyosaki says investing for capital gains is gambling. Derivative Broad definition by Kyosaki a substance that can be made from another substance. A financial derivative is: having a value from an underlying variable assetWhen you buy stock in a company you are buying a derivative. Simple derivatives can be good but extended derivatives are what created our current economic crisis. When banks take your $100 deposit and then lend it out to other banks 10 - 40 times which is what happened. The problem wasn't the derivatives but the greedy people (banks) who gave out the bad loans because they just needed money. Other examples of derivatives are ebooks, products, buying an apartment building and renting it out. Have A Great Resource for Free Webhosting?
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