“The average person is just three paychecks away from bankruptcy. Here’s why.”

Many people spend their entire lives in financial struggle — trapped in debt from the moment they leave school until the day they die. Why? Because they were never taught how the financial game actually works.

On paper, the typical person’s financial life looks like this: they earn a paycheck, use it to cover expenses, and often take on liabilities like car loans, mortgages, and credit card debt. The problem is, these liabilities don’t just disappear — they actually become assets on someone else’s balance sheet. Your car loan is the bank’s income stream. Your mortgage is the lender’s asset. Your credit card bill is the credit company’s profit machine.

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That’s why phrases like “low down payment,” “easy monthly installments,” or “tax breaks for your losses” are really just marketing tricks to pull you deeper into the system. The harsh truth? Most people don’t have assets that generate cashflow for them. Instead, they’re indebted to banks, credit card companies, and even the government.

This is why job security feels like a lifeline — without their paycheck, many people would go broke almost instantly. In fact, studies show the average American is less than three paychecks away from bankruptcy. They believe their house, car, vacation trips, or fancy gadgets are assets, but in reality, those are liabilities draining money out of their pocket.

Why do they believe it? Because they never learned how to read financial statements. They can’t separate facts from opinions, so they end up trapped in a cycle of consumer debt.

The deeper truth is this: life is a money game. And the real question is — who owes who? Most people were trained to play, but no one explained the rules. And because of that, they spend their lives as debtors, working for everyone else instead of building wealth for themselves.

If you want financial freedom, you must learn to see money differently — not just with your eyes, but with your mind. Freedom doesn’t come from chasing paychecks, but from learning the game and positioning yourself on the right side of the Cashflow Quadrant, where your money works for you.

📖 Key Lessons

1. Liabilities Are Not Assets – A car loan or mortgage may feel like an asset, but in reality, they drain your pocket and enrich someone else.

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2. Debt Keeps People Trapped – Easy payments and tax breaks are designed to keep you indebted, not to help you.
   

3. Paycheck Dependence Is Risky – Most people live so close to the edge that without a job, they’d be bankrupt within weeks.
   

4. The Game of Money Is About Control – The wealthy structure their finances so others owe them. The poor and middle class do the opposite.
   

5. Financial Education Is the Key – To escape the debt trap, you must learn how to read numbers and distinguish facts from financial myths.
   

If you are wondering where I learnt this lesson from, then it is from the Rich Dad’s Cashflow Quadrant book. If you want to get the book, then click the link below 👇:

Disclaimer:

This newsletter is for educational purposes only. I am not a licensed financial adviser, accountant, or attorney. Nothing in this content should be interpreted as investment, tax, or legal advice. Always do your own research and consult professionals before making any financial decisions. I’m simply sharing ideas to help you think differently about money.

To read more on:

Private Placement: The Beginner to Intermediate Guide.

Why the Safe Path is Actually the Riskiest — A New Way to See Money

"The Money Trap: Why Earning More Won’t Set You Free"

A government employee can be a Millionaire.

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