what-is-the-difference-between-assets-and-liabilities-develop-a-wealthy-mindset

What is the Difference Between Assets and Liabilities: Develop A Wealthy Mindset

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Living for the better is more than just spirtuality and understanding the laws of attraction and cause and effect. You must also know what things are assets and liabilities when it comes to money in your life. We are going to take a look at how the way you view money, assets, and liabilities. You may think you already know, but I am sure you are going to find clarification of these things you were not taught in school.

The Definitions of Assets and Liabilities

It is important to understand the differences and clarify what assets and liabilities are if you want to attract more wealth into your life. If you want to attract more wealth and feel more wealthy, then you need to learn to think like a wealthy person.Think Like A Wealthy Person Wealthy people view the things they buy differently than unwealthy people. They think in assets.

What is an Asset?

According to the Oxford Dictionary, an asset is, “A valuable or useful thing, person, and quality”. The second defintion is, “property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies”.

The second definition of an asset is very close to the way I learned about assets from Robert Kiyosaki. An asset is anything that earns you money or pays for itself. When you purchase tools for your job, they are an asset. The tools can be anything like; office supplies if you own your own business, fishing gear if you are a fishing tour guide, or even a new chop saw if you are a carpenter.

All of these things help you earn more money when you use them, so they are an asset to your business and your income supply.

What is a Liability?

According to the Oxford Dictionary, a liability is, “The state of being responsible for something, especially by law”. The second defintion is, “A thing for which someone is responsible, especially a debt or financial obligation”.

Again, the second definition of a liability is very close to the way I learned from Mr. Kiyosaki. A liability is anything you owe money on or buy that does not create an income stream for you. When you buy a new car or even a new house to live in, you are taking on a liability.

The House You Live In Is Not An Asset!

I know that you were probably taught in school that buying a house is creating an asset for yourself. I am not sorry to tell you that this is incorrect. If you take out a mortgage from a bank to buy a house, then you are taking on a liability and you have helped the bank gain an asset. The bank makes money from the interest on your mortage. Your house is a liability because the money you areWealthy Dream House spending on the house is not working for you.

Yes, some people will argue that you are building equity by buying a house and they will believe that this money is an asset.  How do you use the equity in your home? You must take out a loan that is backed by the equity of your home and then pay back the use of the equity with interest. The equity loan is an asset for the lender and still a liability for you.

Even if you pay off your house it is still not an asset. If you live in a State or a part of the world that charges property tax, then your house is still creating a tax liability.

Is A House Ever An Asset?

Yes, a house can be an asset if you rent it out and it earns an income that equals the payment amount you make on the home each month. Its even a better asset if the rent you collect pays more than you own each month. See, how this works? A wealthy person buys assets that pay for themselves and eventually he or she owns them without using any of his or her money. The tenets pay for the house and the taxes and the landlord gets to keep the asset.

My work truck is even an asset for my business. I use my truck for business purposes. The amount of money I made from being able to drive from job to job paid for my truck. If I would have bought the truck for personal use only, then it would have been a liability. Wealthy people think in assets and unwealthy people want to buy liabilities.Wealth is More Than Money

Are Liabilities Bad and Should be Avoided?

If you want to have a wealthy mindset and attract money into your life, then you need to be able to think like a wealthy person. You need to think in assets so that you can buy all the fun stuff that you enjoy in life. If you buy assets first and then let the assets buy you the great fun stuff, then you are allowing your money to work for you instead of working for it yourself by trading time for money.

Having the good things in life increase the value of the life you are able to live. Things like boats, fast cars, jet skis, new guitars, new shoes, new outfits, vacations, and all the things you consider fun for your life are just liabilities; but you don’t need to avoid them or label them as bad. They increase the value of your life and therefore, should be enjoyed.

You should still desire the great things in life. Just don’t trade your time for money and then trade your hard earned money for these things. Instead, think like a wealthy person and buy assets with your time earned money and then let that money work for you over time to earn you the fun things in life.

Conclusion

We are taught incorrectly about assets and liabilities in school. We are taught that our house is an asset when it really is a liability for you and only an asset for the bank. You need to learn to think about buying assets that pay for themselves. The things you buy should be tools or items that pay for themselves and are means to an end of you getting the things you want in life.

If you can learn how to think like a wealthy person and start making decisions that help you make your money work for you, then you will be in the right state of mind to manifest more wealth into your life. Learn to think and act like a wealthy person and before you know it, you will become a wealthy person.

What I Recommend To Help You Think Like a Wealthy Person

My Wealthy CarI have three recommendations that will help you to change your mindset from a proverty mindset to a wealthy mindset. All you need to do is to learn true habits of wealthy people, to discover how wealth is more than money, and there is even a fast way to help you put these things in action.

It took you a lifetime to get to where you are now in life. It doesn’t need to take a lifetime to change your mindset from a proverty lifestlye to a wealthy lifestyle.

The first thing I recommend you do is to read “Rich Dad, Poor Dad”, by Robert Kiyosaki. The book is an easy, fun read and it opens your mind to the way wealthy people think.

The second thing I recommend is a program called, “Wealth Beyond Reason” by Bob Doyle. This program introduces you to techniques and other great books that can help you learn about wealth abundance and how it spans across more than just money. Each of the books recommended in the program are available for free within the program. You can check out my review of the program by reading this earlier post.

The third thing I recommend allows you to super charge your learning and get into a wealthy mindset in a very quick way. It is a hypnosis program that helps you notice money making methods already in your daily life and it reprograms your mind to think like a wealthy person in about a month. You can read more about this program by reading this earlier post.

Check out this video of 12 habits of millionaires to help you find a wealthy mindset. If the video is not present, then refresh this page and it should appear.

I really hope that you learn the truth about financial assets and liabilities and turn your life around like I have. The only thing holding you back from becoming wealthy is your education about money and the negative thoughts about money you carry inside you.

It’s truly up to you if you change from a poverty mindest to a wealthy mindset. All you need to do is to make up your mind, take action, and follow through with learning more until you create your dream life.

You can do nothing and stay exactly the way you are now, or you can follow my three recommendations and be on your way to living more wealthy by this time next year. I hope you choose to learn more.


==>I would love to hear your experiences, questions, and thoughts about this subject, so please feel free to leave a comment below. I normally respond within 24 hours. Feel free to share this information with anyone you think will benefit from it. Talk with you later, Greg<==

 


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6 thoughts on “What is the Difference Between Assets and Liabilities: Develop A Wealthy Mindset”

  1. This is a really interesting Post. I consider myself to be someone that has a reasonable handle on investing as well as assets v liabilities and yet I have not adopted your suggested thinking. Your comments do of course make sense although there is that catch 22 challenge of actually getting (so paying for) assets that work for you in the first instance. I guess affordable liabilities that transition into income producing assets is the approach that I have always adopted. A good read though so thanks for sharing – Jason.

    Reply
    • I don’t think you are confused at all. Yes, you must purchase physical assets like rent houses, businesses that run without you being there, and others.
      All businesses start out as liabilities that hopefully become assets within a few years.
      Creating businesses is another good subject I should write about. Many people think they are creating businesses, but what they really are creating is a job. If the business doesn’t run profitably without them there, they have created a job and not a business.
      Thanks for leaving your thoughts.

      Reply
  2. Hey Asdabbi, this is a really great post. Lots of interesting facts, and I’m sure some people may discover that their house is not an asset.
    Rich Dad Poor Dad is one of my favourite books. I love how it empowers us to think differently about finances.
    Keep putting out the great work, and thank you for sharing this information.

    Blessings and Gratitude

    Reply
    • Hi Mikhail 👋
      I am still amazed by what I learned from that little book. I didn’t even realize that wealthy people thought differently and didn’t even know what a poverty mindset was until I read it.

      Peace and gratitude

      Reply
  3. This post has summerised everything I have been learning over the past few years. I am so grateful to read the difference between wealthy and average mindset and the books/programmes recommendation in this great read. I feel highly motivated by this. You are absolutely right, its our mindset that makes us or breaks us.

    Wishing you all positivity and peace.

    Reply
    • 👋
      I am glad you can relate to this post. I grew up being taught the mindsets of poverty and victimhood. It has taken me a few years to find processes that have helped me make positive differences in shorter times that I thought possible.
      Here is to your great future😀

      Reply

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