words alone mean little。 It's the story that counts。 In financial reporting； reading numbers is looking for the plot； the story。 The story of where the cash is flowing。 In 80 percent of most families； the financial story is a story of working hard in an effort to get ahead。 Not because they don't make money。 But because they spend their lives buying liabilities instead of assets。
For instance； this is the cash flow pattern of a poor person； or a young person still at home：
Job （provides ine）…》 Expenses（Taxes Food Rent Clothes Fun Transportation）
Asset （none）
Liability （none）
This is the cash flow pattern of a person in the middle class：
Job （provides ine）…》 Expenses（Taxes Food Mortgage Clothes Fun Transportation）
Asset （none）
Liability （Mortgage Consumer loans Credit Cards）
This is the cash flow pattern of a wealthy person：
Assets（stocks bonds notes real estate intellectual property）…》ine （dividends interest rental ine royalties）
Liabilities （none）
All of these diagrams were obviously oversimplified。 Everyone has living expenses； the need for food； shelter and clothing。
The diagrams show the flow of cash through a poor； middle class or wealthy person's life。 It is the cash flow that tells the story。 It is the story of how a person handles their money； what they do after they get the money in their hand。
The reason I started with the story of the richest men in America is to