Cashflow 101 by Rich Dad Poor Dad?

Question

We just started playing the game CashFlow 101 and need to know about when you take a loan from the bank and the bank gives you the money, what do you do with that money? If the property is, let's say $200+passive cashflow do you end up paying the 10% to the bank with the money handed to you by the bank? Doesnt a positive cash flowing property make you money and the total expenses should go down not up? Are we missing something?

Thanks for the aswers, but when you take the money from the bank, should you probably use it to pay the 10% interest when the payday rolls around?

Answer 1

If you borrow money from the bank, you can use it for whatever you want.

If you take a loan for $5000. You might use that for an opportunity. However, if you have to pay 10% interest of $500/mo, then you have to decide if that's a wise decision for you or not.

So, if it cost you $5000 for say $800 cash flow per pay period, then the $500 interest is a good deal. Likewise, if it cost you $10,000 and you had to borrow $5000 to generate the $800 per month, you might decide that $500 interest is better than not investing. After all, you'll still gain $300 per pay period to pay off the loan.

Hope that helps!

Edit: Yes. When you buy the property, you deduct the cost from your cash. If you don't have enough cash, you have to borrow some. So, do the loan first. Put the $5000 in loans and add the $500 (10%) interest payment to your expenses, reducing your cash flow.

Now, with the loan, you have enough $$ to get the property. Deduct the cost of the property from your cash. Add the property to your listing and add the appropriate cash flow to your Monthly income. Recalc your payday and both the income (due to new property) and expenses (due to interest) should go up. If you bought a good asset, your payday "should" increase, else maybe next time, don't buy assets that drive your paydays down. ;-)

Answer 2

If the property costs $2,000 (downpayment) and may be $5,000 mortgage for example, and it has a positive cashflow of $400 per month, what you do is get a loan of 2,000 to purchase the property. In your worksheet, you add the house in your real estate assets, the mortgage in your liabilities. Then in your cashflow calculation, add in the income of $400, and an expense of $ 200 being your loan repayment amount. so overall, your cashflow will increase by $200, and you'll also have an asset which you can sell at a higher value and repay your mortgage and have more money later.

Answer 3

Rich Dad Poor Dad Game

Answer 4

This penny stock service has years of proven experience. Ultimately it is the best service for beginners to use https://tr.im/x7Ftg
You will have to wait between 3 and 10 days to get into the system in most cases. When I signed up it took 8 days. I wished it was faster, but if you can wait a week or two to start earn life changing money than you will have what it takes to make it in this business.