It turns out, the list of reasons is pretty short.
The truth is, the number one reason why the rich make much more money is because the rich learn how to think rich! Making money, building wealth, getting rich; these are all skills, just like reading, writing and arithmetic. Most people teach their kids to go to school, study hard and go get a good job. The rich don’t teach their kids to get jobs, but instead to create jobs!
The good news is, everything there is to know about money can be summed up in four simple ideas:
- Assets
- Liabilities
- Leverage
- Residual Income
We’ll save the last two for another day, but for now let’s talk about Assets vs Liabilities. For our purposes, an asset is anything that makes you money. A profitable business, a stock that pays dividends, rental property, a hammer & screw driver can all be assets. A liability is anything that costs you money. A business that loses money and a rental property that does not produce enough 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 rich make much more money than the poor and the middle class is that they know that trying to get through life with more liabilities than assets is like trying to swim with concrete blocks tied to your feet! Most people seem to make a hobby of collecting liabilities; they’ll buy items on credit cards, they mortgage their home, they buy their car with payments. You simply cannot get ahead financially with excessive debt and liabilities holding you down.
So, is a house an asset or a liability?
We’ll it could be either. It would be an asset if it is a rental and produces a positive cash flow, or if you run a profitable business out of you home. But it is a liability if it does not generate more money than it costs. So for most people, what they think is their biggest asset is really their biggest liability!
Asset vs Liability – Your car?
Your vehicle is an asset if it makes you more money than it costs. Do you use it for work? Do you use it for advertising? Do you charge people for rides? For most people, their car is their second biggest liability.
Asset vs Liability – Your telephone?
Well, are you socializing with friends or building a business?
I think you are seeing the trend hear. Now think about the things in your life; look around your home and office. Can you identify the assets vs liabilities? I am not saying all liabilities are bad or that all assets are good.
The first step in building wealth is understanding the difference between assets and liabilities.
About the Author:
Lee Spaziano is a professional entrepreneur who has worked in several industries.
Lee also specializes in Wealth and Financial Independence Counseling.
Go to www.FortuneSecretsRevealed.com to learn more about building wealth and creating your own financial freedom.
Or visit www.CashSecretsRevealed.com to learn how to save money by getting cash back on everything you buy.
