20 Sep

RichDadPoorDadRobert Kiyosaki, author of the all time, best selling, personal finance book – Rich Dad Poor Dad, caused a bit of a commotion when he released this book in 1997 and stated that your house is NOT an asset!

If you want to be rich, you have to know the difference between assets and liabilities.

Many people are struggling financially today because they think some of their liabilities are assets.
Your house is not an asset.
Your car is not an asset.

What makes something as asset is that it puts money into your pocket.

A liability takes money out of your pocket. Your house is probably NOT an asset because it takes money out of your pocket. Even if your mortgage is paid off, there is insurance and taxes and other expenses TAKING MONEY OUT OF YOUR POCKET.

If you rent your house to others, or a room in your house, and it brings in more money than it costs you in expenses, THEN it’s an asset!

This is cash flow into your pocket. A house can be an asset or a liability depending on cash flow. If it flows in your pockets it’s an asset, if it flows money out of your pocket it’s a liability. Once you understand the true difference between an asset and a liability, you can begin your journey to financial freedom.

Learn more about Assets Vs. Liabilities; the four different types of people in the world of money; the CASHFLOW Quadrant, and so much more….

All the best as you continue your journey to increase your financial IQ!

Leave a Reply:

You must be logged in to post a comment.