Too many people focus on the money rich people have instead of their most significant wealth; their education. It is not about how much money you make, it's how much money you can keep and how many generations you can keep the money. A life of wealth starts with financial literacy. The basic language of financial literacy is accounting. Unfortunately for most people, the subject of accounting is the most boring and confusing thing in the world. However, the basics are very simple. Consider the foundation required for a house, now imagine if you built a skyscraper on that house's foundation. How stable would the skyscraper be? Could you even finish building the skyscraper before it fell? Trying to become wealthy without having financial intelligence is like building a skyscraper on a house's foundation.

The first rule of a solid financial foundation is to know the difference between an asset and a liability. An asset puts money in your pocket. A liability takes money out of your pocket. It really is just that simple. However, the reason the poor and the middle class can't get out of the rat race is that they think liabilities are assets. An asset is not defined in words, but in understanding numbers on your profit-and-loss statement and a balance sheet. The profit-and-loss statement measures income and expenses and the balance sheet measures assets and liabilities. The relationship between the P&L and the balance sheet is vital to defining assets and liabilities. The poor use a source of income to pay for expenses and has no money left over for liabilities or assets. The middle class uses a source of income to buy liabilities that create more expenses. The rich invent assets that generate income that pays for expenses and liabilities. The reason more money does not solve the problem is that adding more money only accentuates the cash flow pattern you are already running. When given more money, the poor and middle class simply buy more liabilities and create more expenses.