🕸 ASSET is anything that puts money in your pocket, whether it exists or not.
🕸 LIABILITY is anything that takes money out of your pocket.
👉🏿To become wealthy, understanding and working with assets and liabilities is crucial.
🕸All rich people buy Assets, while poor and middle-class individuals buy Liabilities that they think are Assets.
🕸When you ask most people what Assets they own, they will mention things like houses, cars, phones, laptops, shops, etc.
🕸If these things do not generate income for you, they are not Assets but Liabilities.
🕸Let's take the example of a house. If you have a house that you live in yourself, it is a big Liability because it does not bring in any money. Instead, it takes money out of your pocket for electricity, water, maintenance, repairs, furniture, etc.
🕸But if you rent out the house, then it becomes an Asset.
🕸A car that you use for personal daily use is a big Liability. It requires fuel, servicing, and if you bought it on a bank loan, it's even worse. However, if it's used for business purposes, then it becomes an Asset.
🕸A phone that doesn't bring in any money other than buying airtime and chatting is a Liability. The same applies to TVs, radios, and even shops because when closed, they don't generate any income; instead, you rely on them for all expenses.
🕸Many educated employees die poor because their salaries and loans end up buying liabilities like furniture, TV, radio, large phones, cars, fridges, clothes, shoes instead of Assets that could bring in additional income. In the end, they sell their liabilities and remain extremely poor.
🕸Many people think that increasing their salary will solve their problems. Instead, problems increase because when income increases, expenses also increase, adding more Liabilities. This is all because we are not taught financial education in school.
🕸All wealthy individuals focus on increasing their income and reducing expenses by buying more Assets and reducing Liabilities. They buy Luxuries like cars, TVs, large phones only when the Assets or investments they have yield profits. This is why they say the secret to wealth is frugality, while others increase expenses as income grows.
🕸If you want to be wealthy, you must understand the true meaning of wealth.
🕸 Wealth is a person's ability to survive for a certain number of days without working. If you stopped working today, how long could you survive?
🕸If you cannot afford your daily needs for even a year without working, then you do not have Wealth because you lack Assets that can generate income to sustain you when you stop working.
🕸Ask yourself if your salary buys Assets or Liabilities and also ask yourself if you are Wealthy or not.
Let's live by these principles 👆👆