Assets Vs Liabilities - Why the Rich Make Much More Money Than Everybody Else?
Ever wondered why it is the wealthy make much more money than everyone else?
It turns out, the list of factors is quite short.
In reality, the number one cause why the rich make much more money is because the wealthy learn how to think wealthy! Making money, building wealth, getting rich; they're all skills, just like reading, writing and arithmetic. Almost everyone will teach their kids to attend school, study hard and go get a good career. The wealthy don't teach their kids to get jobs, but rather to create jobs!
The good thing is, almost everything there is to learn about money can be summed up in four basic ideas:
We'll save the final two for some other day, for the time being let's talk about Assets vs Liabilities. For our purposes, an asset is anything that makes you money. A profitable company, a stock that has dividends, rental houses, a hammer & screw driver can all be assets. A liability is anything that costs you money. A home business that loses money along with a rental home that will never generate sufficient rent to cover the mortgage are liabilities.
Top-Secret Method of the Poor - Acquire Liabilities.
Top-Secret Method of the Rich - Acquire Assets.
One reason the wealthy make much more money?n comparison to the poor and the middle class is the fact they fully understand that getting through life with more debts than assets is actually not unlike attempting to swim with concrete blocks tied to your feet! The majority of folks seem to make a hobby of accumulating liabilities; they'll buy things on credit cards, they mortgage their home, they buy their car with installment payments. You simply can't succeed financially having high debt and liabilities holding you down.
So, is a house an asset or a liability?
We'll it may be either. It could be an asset if it is a rental and produces a positive net income, or if you operate a successful business out of your home. But it can be a liability if it does not generate more income than it costs. So for most people, what they consider is their biggest asset actually is their biggest liability!
Asset vs Liability - Your car?
Your car is an asset if it makes you more money than it costs. Do you use it for work? Do you use it for marketing? Do you charge people for rides? For most people, their automobile is their second biggest liability.
Asset vs Liability - Your mobile phone?
Well, are you socializing with friends or developing a business?
I think you are seeing a trend here. Now consider the things in your life; look around your home and business. Are you able to determine the assets vs liabilities? I'm not saying all liabilities are bad or that all assets are good. I am simply stating that the first step in creating wealth is knowing the difference between assets and liabilities.
It turns out, the list of factors is quite short.
In reality, the number one cause why the rich make much more money is because the wealthy learn how to think wealthy! Making money, building wealth, getting rich; they're all skills, just like reading, writing and arithmetic. Almost everyone will teach their kids to attend school, study hard and go get a good career. The wealthy don't teach their kids to get jobs, but rather to create jobs!
The good thing is, almost everything there is to learn about money can be summed up in four basic ideas:
- Assets
- Liabilities
- Leverage
- Residual Income
We'll save the final two for some other day, for the time being let's talk about Assets vs Liabilities. For our purposes, an asset is anything that makes you money. A profitable company, a stock that has dividends, rental houses, a hammer & screw driver can all be assets. A liability is anything that costs you money. A home business that loses money along with a rental home that will never generate sufficient rent to cover the mortgage are liabilities.
Top-Secret Method of the Poor - Acquire Liabilities.
Top-Secret Method of the Rich - Acquire Assets.
One reason the wealthy make much more money?n comparison to the poor and the middle class is the fact they fully understand that getting through life with more debts than assets is actually not unlike attempting to swim with concrete blocks tied to your feet! The majority of folks seem to make a hobby of accumulating liabilities; they'll buy things on credit cards, they mortgage their home, they buy their car with installment payments. You simply can't succeed financially having high debt and liabilities holding you down.
So, is a house an asset or a liability?
We'll it may be either. It could be an asset if it is a rental and produces a positive net income, or if you operate a successful business out of your home. But it can be a liability if it does not generate more income than it costs. So for most people, what they consider is their biggest asset actually is their biggest liability!
Asset vs Liability - Your car?
Your car is an asset if it makes you more money than it costs. Do you use it for work? Do you use it for marketing? Do you charge people for rides? For most people, their automobile is their second biggest liability.
Asset vs Liability - Your mobile phone?
Well, are you socializing with friends or developing a business?
I think you are seeing a trend here. Now consider the things in your life; look around your home and business. Are you able to determine the assets vs liabilities? I'm not saying all liabilities are bad or that all assets are good. I am simply stating that the first step in creating wealth is knowing the difference between assets and liabilities.
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