Liabilities take money out of your pocket from "summary" of Rich Dad Poor Dad by Robert T. Kiyosaki,Sharon Lechter
If you want to become financially free, you need to understand the difference between assets and liabilities. Assets put money in your pocket, while liabilities take money out. The concept is simple, yet many people struggle to grasp it.
Assets are things that generate income for you. They can be investments, businesses, or anything that puts money in your pocket without you having to work for it. Liabilities, on the other hand, are things that you own that cost you money. This could be your car, your house, or anything that requires you to spend money on upkeep or maintenance.
Many people make the mistake of thinking that their house is an asset. While it may increase in value over time, it still takes money out of your pocket every month in the form of mortgage payments, property taxes, and maintenance costs. This is why it is considered a liability.
If you want to build wealth, you need to focus on acquiring assets that will generate income for you. This could be through investing in real estate, starting a business, or investing in the stock market. By increasing your assets and reducing your liabilities, you can achieve financial freedom.
It's important to understand that not all assets are created equal. Some assets may appreciate in value, while others may generate passive income. The key is to diversify your asset portfolio to maximize your earning potential.
By understanding the difference between assets and liabilities, you can make smarter financial decisions that will benefit you in the long run. Remember, assets put money in your pocket, while liabilities take money out. Focus on acquiring assets that will help you achieve your financial goals.
