Financial Coaching: Start A Business Part-Time

Cashflow 101Recently I was delivering a day of financial coaching using Robert Kiyosaki’s Cashflow 101 game to a handful of self-employed clients. I highly recommend this if you are interested in improving your finances or the way you are with money. Robert Kiyosaki is the Author of the Rich Dad Poor Dad series of books and it was there that my journey to financial freedom began over ten years ago.

In the game you get the chance to play with the sums of those financial opportunities you are considering in real life. You get to play with the maths and try on the feelings of being an investor in stocks and shares, business and property, without the real “risks” before you are informed, until you are good and ready.

Firstly you are all little rats in the Rat Race, just like real life. The goal is to achieve more passive income than your expenses, then you are free – free to give up work if you choose and live the life of Riley on the Fast Track, buying dreams and buying businesses for cash.

Often it can take as long as four hours to get all your players out of the Rat Race but this time we were lucky in that our first player exited the Rat Race within 35 minutes. Our second stroke of luck was that all the players shared a collaborative approach – one out, all out – a bit like the Musketeers. In my view, this is the only way to play this game.

And hey presto, before lunch, the players had worked out a way between them to use their newly financially free pal to let down an abundant yet profitable ladder from her lofty solo spot on the Fast Track and help them all out too.

Would that this happens all the time in the game (and in life). It does not. Many of us are far too used to slogging on alone.

The next breakthrough came from observing how we all reacted when we drew the card which says “start a company part-time”. It costs either $3,000 or $5,000 to start your own small business in Cashflow 101 and, in the Rat Race stage of the game, you have no idea whether or not your own business will ever make you any money. The card warns that you will make no profits during start-up, you will be required to work long hours with no extra pay, there is a zero percent return on your initial investment and there is no certainty offered about whether or not you will ever be able to sell your small business in the future. Just like real life, as I am wont to say when facilitating this game.

In real life, those of us playing in this particular game had done this at least once each, often more than once. But this time we started to curl our lip at this “opportunity” and consider that although it pays the bills, it is perhaps not the dream ticket to financial freedom we had all once hoped. What goes on to happen in the game if you draw the right card is that you can increase your monthly cashflow when business looks up by $250 to $400 and ultimately you might be able to sell your small biz for $50,000 or $100,000. Even then, it’s not a king’s ransom, is it?

Instead we turned to buying into limited partnerships. Not only were there four times as many opportunities but the passive income they provide is considerably larger, they sell for much bigger sums and they allow for collaboration which allows everyone to go farther faster.

Still struggling on alone? Time to play Cashflow 101 and practise being in collaborative business with others so you can see how this feels, before you take the plunge.

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