Many people get confused with the terms asset and liability. The dictionary definition could confuse people. The book, Rich Dad Poor Dad does a good job on explaining them both better than the dictionary. It simply says that assets put money in your pocket and liabilities take money out of your pocket. Buying assets will result in giving you money back while buying liabilities will transfer into your expenses so you can spend money. To become rich you have to have a strong financial literacy.
An asset is property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies. A liability is a thing for which someone is responsible, especially a debt or financial obligation. The difference between the two is that one is something that helps you financially, and the other does not help.
An asset is like a tree and they are large enough to grow themselves. You have to water it for years and then it'll stop needing water. When it's done growing, the shade will provide you with entertainment. The poor and middle class acquire liabilities. It's like kids saying they want to be rich because they will have to wait forever and all their expenses will bounce that option out of the way.
Rich dad says that if you want to be rich that all you need to know is the difference between assetsand liabilities. He says that “rich people acquire assets. The poor and middle class acquire liabilities, but think that they are assets. An asset is something that ours money in your pocket. A liability is something that takes money out of your pocket. If you want to be rich, buy assets
I believe that when people think of asset and liability, they think of almost the same thing. However, wealthy people know that they are completely different as other believe liability is an asset. The book explains it as an asset being something you put into your pocket. On the other hand, it explains that a liability is something you take out of your pocket. An example being money. An asset is something you get money back from but a liability a something you put your money into.
The difference between asset and liability is simple to understand in the words it is put into in the book. An asset is the money going into your pocket, and a liability is the money going out of your pocket. Many people couldn’t tell you what these two words are as if you look them up, the average human couldn’t tell you what it means. But when put into these simple words, it makes sense. In order for a person to get rich, they need to figure out their assets, and make sure they are keeping their money more than they are spending it.
The difference between an asset and a liability is simple. An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket. If you want to be rich, simply spend your life buying assets. If you want to be poor or middle class, spend your life buying liabilities.
Many people get confused with the terms asset and liability. The dictionary definition could confuse people. The book, Rich Dad Poor Dad does a good job on explaining them both better than the dictionary. It simply says that assets put money in your pocket and liabilities take money out of your pocket. Buying assets will result in giving you money back while buying liabilities will transfer into your expenses so you can spend money. To become rich you have to have a strong financial literacy.
ReplyDeleteAn asset is property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies. A liability is a thing for which someone is responsible, especially a debt or financial obligation. The difference between the two is that one is something that helps you financially, and the other does not help.
ReplyDeleteAn asset is like a tree and they are large enough to grow themselves. You have to water it for years and then it'll stop needing water. When it's done growing, the shade will provide you with entertainment. The poor and middle class acquire liabilities. It's like kids saying they want to be rich because they will have to wait forever and all their expenses will bounce that option out of the way.
ReplyDeleteRich dad says that if you want to be rich that all you need to know is the difference between assetsand liabilities. He says that “rich people acquire assets. The poor and middle class acquire liabilities, but think that they are assets. An asset is something that ours money in your pocket. A liability is something that takes money out of your pocket. If you want to be rich, buy assets
ReplyDeleteI believe that when people think of asset and liability, they think of almost the same thing. However, wealthy people know that they are completely different as other believe liability is an asset. The book explains it as an asset being something you put into your pocket. On the other hand, it explains that a liability is something you take out of your pocket. An example being money. An asset is something you get money back from but a liability a something you put your money into.
ReplyDeleteThe difference between asset and liability is simple to understand in the words it is put into in the book. An asset is the money going into your pocket, and a liability is the money going out of your pocket. Many people couldn’t tell you what these two words are as if you look them up, the average human couldn’t tell you what it means. But when put into these simple words, it makes sense. In order for a person to get rich, they need to figure out their assets, and make sure they are keeping their money more than they are spending it.
ReplyDeleteThe difference between an asset and a liability is simple. An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket. If you want to be rich, simply spend your life buying assets. If you want to be poor or middle class, spend your life buying liabilities.
ReplyDelete