The fundamentals of financial competence are consisted in mastering one and the only rule:

It is necessary to understand the difference between assets and liabilities, and acquire assets.

According to Robert Kiyosaki, following this rule can help everybody become rich and relieve from financial difficulties.

This rule is the first and the only one. Perhaps it seems absurdly simple but a lot of people don’t understand how important it is. Many people have financial hardships just because they do not understand the difference between assets and liabilities.

Rich people acquire assets. Poor people and middle class buy liabilities and see them as assets.

What are assets and liabilities and what is the difference between them?

Asset is what yields money.

Liability is what takes money from you.

These are the fundamentals of financial competence – the basis of your future financial success. If you have known it, sorry. Otherwise, let me congratulate you on the fact that you have just acquired the fundamentals of funancial competence. However, the knowledge is death until you come it into you consciousness and start doing something. What assets you have and what you can create or acquire?

There is a principal, which is used by people who became rich. Robert Kiyosaki calls it “3 piggy banks”. Mark Allen mentions this principal in his book “The Millionaire Course“. I follow this principal now. And I am going to share the 3 piggy banks principal with you.

First of all, what are 3 piggy banks? One of them is savings. It is the money, which you save for yourself in order to use them somehow in future. You put away money for a rainy day.

The second piggy bank is your investments. Money that you invest in something: shares, bank deposit, mutual funds, bonds, business etc. You could invest in your education too. This piggy bank is for increasing money.

The third piggy bank is for donation and charity. It is the money that you give to someone. Giving away part of your income and supporting different charity organizations, we care of each other. This piggy bank encourages you to gain more in order to give more.

Ok, I have to create 3 piggy banks, right? Right. But how can I do it if I spent all money that I get or even more? It is easy, really. Turn on you consciousness and start with 10% decision using The Law of Accumulation. Continue save 10% of you income every month until you get used to do it. You have to make a habit. It is easy to live on 90% of you income, really. When the habit is formed, you could start create another piggy bank. And then the third one. This way I have come to “3 piggy bank” principal.

Other way is proposed by Robert Kiyosaki in his video program “60 Minutes to Getting Rich“. His advice is to start putting 1$ to each piggy bank. Is it easy? I am sure, everybody, who has desire, could do it. Then start putting 10$. 100$. 1000$. 10000$. And continue to increase, until you will save 10% of you income to each piggy bank.

Put regularly 10% of your income is the principal. Another principal, which will help you to do it, is called ‘pay yourself first’. It means, when you receive money, you have to pay to your piggy banks before you will pay to someone else – government, stores, salespersons etc. Pay yourself first.

The idea of 3 piggy banks is the following: rich is who saves a lot, but not who earns a lot. There are a lot of people on the Earth who have earn a lot of money but they spend a lot of money too. If they are fired one day, they could not manage with their expenses for a long time. 3 piggy banks principal allows you to create passive income which will cover your expenses, when you earnings instantly drop down. You keep, you invest, you give away – that is why you are rich.

If you apply 3 piggy banks principal in your life, you will gain great effect. You have real abundance in your life; you have all what you want. You feel good, because you give a lot of money to others. And you do what you love to do.