Straight from Rich Dad Poor Dad
Asset or Liability? 🤔 Most people never get this one simple idea: An asset puts money in your pocket.A liability takes money OUT of your pocket. That’s it. That’s the whole game. 👇 1️⃣ Your house - If it costs you money every month (mortgage, taxes, repairs) and doesn’t pay you… it’s a Liability. - If it’s a rental that sends you cash flow every month after all expenses… it’s an Asset. 2️⃣ Your car - Car payment, insurance, gas, repairs = money leaving your pocket every month 🚗💸 - Unless that car is being used to produce income (delivery, Turo, business vehicle that nets profit), it’s a liability. 3️⃣ Your credit cards - If you’re using them to buy stuff that doesn’t pay you back… that balance is a liability. - Debt tied to cash-flowing assets (notes, rentals, etc.) can be good if the cash flow > payment. 4️⃣ Investments - Stocks that don’t pay you? You hope they go up. That’s speculation. - Notes, rentals, private lending, cash-flow deals? They PAY YOU while you sleep. That’s an asset. 5️⃣ Retirement accounts - A 401(k) sitting in mutual funds, praying the market behaves = 🚩 - A self-directed account owning notes, rentals, private deals spitting out cash flow = real assets. If you look at your life right now… Are you stacking assets or collecting liabilities with fancy names? 👇 Drop one thing in your life that you thought was an asset… but now realize is actually a liability.