Liabilities take money out of your pocket from "summary" of Summary - Rich Dad Poor Dad by David De Angelis
When you think about it, it's quite simple. Liabilities are things that cost you money. They are expenses that you have to pay for on a regular basis. These could be things like your mortgage, car loan, credit card debt, or any other type of financial obligation that requires you to make regular payments.
Now, when you have liabilities, these expenses take money out of your pocket. Every month, you have to come up with the cash to pay for these things. This means that you have less money available to spend on other things that you may want or need. It also means that you have less money available to invest in assets that could potentially bring in more money for you in the long run.
On the other hand, assets are things that put money into your pocket. These are things that generate income or increase in value over time. Assets could be investments like stocks, bonds, or real estate properties that provide you with a return on your money. They could also be businesses that you own or intellectual property that you have created.
The key to financial success is to focus on acquiring assets rather than accumulating liabilities. By investing in assets that generate income or appreciate in value, you can increase your wealth over time. This is because assets have the potential to bring in more money for you, while liabilities only take money out of your pocket.
So, the next time you're faced with a financial decision, ask yourself whether it will result in acquiring an asset or a liability. Remember that assets put money into your pocket, while liabilities take money out of your pocket. By making smart choices and focusing on building your asset base, you can set yourself up for financial success in the long run.
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