Cashflow Management

Part I - The Rat Race
The “Rat Race” is the inner circle on the game board. (The Rat Race is where most of us are
trapped day-in and day-out.)
Your goal is to get out of the Rat Race and onto the Fast Track.
To get out of the Rat Race you must buy investments which give you cash flow (or passive income) so that your Passive Income is greater than your Total Expenses.

Part II - Fast Track
The “Fast Track” is the outer track of the game board. (The Fast Track is where the Rich play the game of money.)

Once you’ve moved from the Rat Race to the Fast Track your goals are to:
1) BUY YOUR DREAM
The Dreams are the pink spaces on the Fast Track
and/or
2) INCREASE YOUR MONTHLY CASH FLOW

You win CASHFLOW® if:
1) You are the first Player to buy your Dream.
If a Player buys their Dream on the Fast Track then that Player is the winner and the game is over.
or
2) You are the first Player on the Fast Track to accumulate $50,000 in Fast Track Cash Flow by
buying Fast Track businesses (green squares).

1) Elect one Player to act as Banker. The Banker should be someone good with numbers and able to handle cash transactions quickly. If the Banker is also playing the game then they must keep
their own game money separate from the money of the Bank.

2) Shuffle the Opportunity, The Market and Doodads cards. Place them face down on the game
board on their marked places.

3) Distribute one Income Statement/Balance Sheet to each Player. This is your “Game Card”.
Take a moment to review the Game Card. Get familiar with the form and the words.

4) Shuffle the Profession cards and randomly deal, face down, one to each Player. Distribute
one pencil to each Player. Each Player then turns over their Profession card and enters the
information from it, exactly as it is written, onto their Game Card.
Note: Each Player starts the game with no bank loans, no bank loan payment, and no children.

5) Meet your Auditor. This is the person on your right. The Auditor’s role is to assist you in
making accurate calculations. Each time you make a change to your Game Card your Auditor
must check your work.

6) The Banker distributes cash to each Player. The amount of cash each Player receives at the
beginning of the game is:
a) The Player’s Monthly Cash Flow (income minus expenses, on your Game Card). Your
Monthly Cash Flow is also your Pay Check.
b) The Player’s Savings (listed on your Game Card). Your savings is only paid to you at the
start of the game. Erase the savings amount from your Game Card once you receive it.
Savings is not part of your Pay Check.

1) Select a Banker for the game.
2)Place *Opportunity, The Market and Doodads cards on board.
3)Distribute a Game Card (Income Statement/Balance Sheet) to each Player.
4) Deal out one Profession Card to each Player.
5)Transfer information from Profession Card to Game Card.
6)Meet your Auditor. (Player to your right.)
7) Banker distributes cash (Monthly Cash Flow + Savings) to each Player.
Remember to erase savings from your Game Card once you receive it.
8) Choose your playing pieces; Rat, Cheese and Tokens, all of the same color.
9)Choose your “Dream” on the Fast Track by placing your Cheese piece on it.
10) Place your Rat playing piece on “Start Here” arrow on the Rat Race.
11) Roll die to see who goes first.
12) Begin playing CASHFLOW®!

Remember:
• To get out of the Rat Race your Passive Income must be greater than your Total Expenses.
• To build up your Passive Income, buy assets that provide a positive cash flow.
• Read the *Opportunity, The Market and Doodads cards aloud. Every card could affect your
financial position.
• Beware of Bankruptcy. Be smart with your investments.
• Adjust your strategy as the market changes.

*Big Deal and Small Deal Cards

Some tips to lessen your expenses.

Divide your credit card payments

Instead of paying $200 once a month, pay $100 twice a month. Since the finance charges are based on your average daily balance, you will reduce your monthly finance charge without paying any more than you already do. Dividing your credit card payments requires a bit more involvement than most effortless budget cuts do, but not too much.

Review your phone plans

Do you still use your home telephone or do you just keep it around because you’re accustomed to it? If everyone in your household has a cellular phone, then consider dropping the landline and save yourself the monthly payment.
When is the last time you looked at your cellular plan? I'm not going to tell you to try talk less or watch your minutes (that is painful), but look at your statement or call your company to find out what your average usage is per month. Could you use a less expensive plan based on your monthly average? If you can, make the change and save yourself the extra money.

Disconnect electric devices when not in use

You have probably heard that electronic devices continue to suck energy after you’ve turned them off if you've left them plugged in. You can save a lot of money by unplugging your electronic devices when you are not using them. This does require some effort, but the easiest way to do this is to use power strips, so you can unplug multiple devices with one plug. It might sound like a hassle, but doing it will cut down your power bill substantially. The Organization for Economic Co-operation and Development estimates that standby power accounts for 3% to 4% of residential electricity use.

Buy generic prescriptions and food

If you haven’t started using generic drugs, you need to start right away. You’ll get the same drug for a fraction of the cost. According to the National Association of Chain Drug Stores, the average retail price of a generic prescription drug purchase in 2006 was $32.23, while brand-name drugs went for an average of $111.02. The same idea can be applied to food. Don’t be afraid to buy the knockoff items in your local grocery store. Most of the time, generic food products are produced and packaged at the same facility and just receive different labels. Because off-brand companies typically do not advertise, their production costs are cheaper. These effortless budget cuts could save you upward of 25% on your bill.

See the animated explanation of how Cashflow 101 works. Click here

1. Money in a bank account is safe.

A bank is one of the safest places to stash your cash since your account is insured against loss by the government. In Philippines account is insured up to P250,000 per depositor and might increase to P500,000 per depositor.

2. You pay for the convenience of a bank account.

Banks pay lower rates on interest-bearing accounts than brokerages and mutual fund companies. And watch out for bank fees especially if your account is below the minimum required balance.

3. Inflation can eat what you earn from a bank.

Even at a low rate of inflation, the annual creep in the cost of goods and services usually outpaces what banks pay in interest-bearing accounts.

1. Understand and overcome the obstacles to build wealth
2. Know what you want and dream big
3. Find out where you are and what you have.
4. Make savings a lifelong habit
5. Spend your money wisely
6. Get out and stay out of debt
7. Find ways to earn more, to save more
8. Prepare for life's financial challenges
9. Plan for a hassle-free and comfortable retirement
10. Grow your money through smart investing
11. Take care of your health to enjoy your wealth
12. Share your blessings and receive more riches

Source: 12 Steps to Build Wealth on Any Income by Alvin Tabañag

TIP #1: Never...Ever...Quit.
I believe that there are many things to understand to succeed at the game. But, for me, the most important is: NEVER, EVER, EVER, EVER QUIT -- ON YOURSELF! No matter how you feel, NEVER QUIT!
– Kathleen M

TIP #2: Step Out of Your Comfort Zone.
CASHFLOW 101 is so powerful because it reflects your true behavior and allows you to take risks in a safe environment. Step out of your comfort zone, and do things you may not feel comfortable doing in the “real world.” You’ll be amazed at how it changes your perspective.
– Jack N

TIP #3: Celebrate the Joy of Success.
The biggest 'tip' I have learned so far is that your way to wealth is the joy- not the wealth- you achieve. This became very clear to me after playing dozens of times and realizing that I would actually SKIP the Dreams on the Fast Track! I was more interested in winning the game than 'golfing around the world.'
– Jeff B

TIP #4: Focus on Your Goals.
I found that while playing the game, I would focus on the 'negative' spaces – "Baby" or "Downsized" – and hope not to land there. I was focusing specifically on what I didn't want, and, oddly enough, landing on those spaces most often. I began to repeat the numbers I WANTED to have come up, and just as oddly, those numbers seemed to come up more than mere chance would support. The lesson is simple: focus on your goals, not on what may go wrong.
– Hugh C

TIP #5: Only Take Advice from Successful People.
When the Opportunity Card comes up, some people look to fellow players for guidance. Make sure that those you take advice from are having success and on their way to getting out of the Rat Race!
– Cal J

TIP #6: Your words are your reality. Never Say “Can’t.”
There is ALWAYS a way. Think outside the box. Find a way to make your “can’t” a “can.”
– Grace N

TIP #7: Take Note of Your Overall Habits.
After playing the game, take note of your overall habits- good and bad. Evaluate how those habits helped or hindered your game play. In the next game, make a concerted effort to change the habits that may have prevented you from getting out of the Rat Race.
– Toni E

TIP #8: Get Rid of Bad Debt.
The thing that has expedited my exit from the Rat Race: Paying off ‘bad debt.’
– Bridget S

TIP #9: Create Your Own Rules.
Creating your own rules (or modifying the game rules) can make CASHFLOW 101 more challenging. For instance, play a game where you and your teammates: (a) Pass on purchasing $1 & $5 stock deals; (b) Remove $0 down real estate transactions; (c) Remove all the doodad cards that are $100 or less.
– Dylan B

TIP #10: Don’t Limit Yourself.
Along with bad debt, there is good debt. Don’t limit yourself to your cash on-hand. The lower the price of the stock, the more money you should borrow. When you eventually sell your shares, your rate of return will more than make up for any bank payments you have to make.
– Roosevelt C

TIP #11: Give Back.
Giving back is a necessary step in getting out of the Rat Race. Newton’s law states, “For every action there is a reaction.” Give and you shall receive.
– Lisa N

TIP #12: Put Your Ego on the Shelf.
The game has showed me some things about myself I never would have guessed- like the fact that my ego gets me in more trouble than anything else. The deals you turn down count just as much as the deals you make. Don't let your ego get you in over your head.
– Tami R

TIP #13: Be Able to Make Quick Decisions.
As Robert says, “Fortune favors the prepared mind.” When the “Opportunity Card” comes up, you need to be able to determine if it is a good or bad deal quickly. Otherwise, just like in the “real world,” you might miss a great opportunity.
– Phil L

TIP #14: Learn From Your Mistakes.
Mistakes are opportunities to learn something new. Take risks, make mistakes… and be smarter for it!
– George C

TIP #15: Give Feedback to Fellow Players, Not Advice.
Feedback occurs after the action, advice happens before the action. Your fellow players will learn more if you tell them what they did and how they might try a different approach next time, rather than telling them what to do and how to do it.
– John D

TIP #16: Reinvest Your Cash.
Don’t let it sit there doing nothing… get your money working for you so you can get out of the Rat Race!
– Jenny M

TIP #17: Learn From Others.
Take note of fellow players’ winning game strategies. Next time, test them out for yourself.
– Cheridan S

TIP #18: Overcome Fear.
Fear isn’t the problem; it’s how you handle fear: specifically, the fear of losing money. Losers are defeated by failure. Winners are inspired by it.
– Jorge T

TIP #19: Always Look For Opportunities.
No matter where you are in the game… always be on the lookout for opportunities.
– Elle J

TIP #20: Reflect on Lessons Learned.
Always think about what you can learn from the game you just played. You may not always have time to reflect on the game as it is played (and sometimes it is more interesting NOT to play, but to just observe!), but you should always take time later to think about the game and what it taught you. This is part of the educational process and so it should be savored. You can learn a lot about how investing works, how well your investment strategies pay off, and what it takes to exit the real Rat Race.
– Dave G