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The subject of assets and liabilities has been pretty hot, ever since it has been touched by Robert Kiyosaki in his book Rich Dad Poor Dad. I have already written a review of the book, but considering the fact that I have some personal objections to some of his claims, I wanted to clarify them and offer some additional explanation.
The difference between these two is simple – assets are basically everything that puts money into your pocket, while liabilities are doing the opposite.
So Kiyosaki comes with the logical conclusion – acquire assets and get rid of liabilities, but he also makes one controversial claim – the house you bought is not the asset but liability.
There is no doubt that he raised some awareness about this important subject and some level of financial education is really needed in the world today. But I am afraid that things are not that simple as they appear to be.
How do we acquire assets?
Most of people strive to buy a property and it is a common thing to do, especially here in the western world. The same pattern is followed basically everywhere, people go to through the education to find best job they can, get married and then they want to buy a place (house, apartment…) to live in and raise a family.
If you live this way and if you plan to work your whole life all the way to the pension, than your house is actually a liability! Kiyosaki was right, it will be something that will constantly drain your economy through the debt that will probably never be payed of.
On top of that, value of the property may fall and you make additional loss on the investment.
But, I can not just discard all cases of big profits made by many people buying and selling properties, all around the world. I am not talking about investors but ordinary people. So property can be a great asset as well, it is not just black of white.
Another things he mentions regards the most common types of assets like: stocks, bonds, funds, intellectual properties and so on…. Now, I respect that he also mentions the education needed to deal with these things but it is not pointed strongly enough.
In the perfect world all people would know about these forms of assets, but we do not live in the perfect world and most people do not know anything about these things, which means they are not available as assets.
If you invest some time and effort to learn about them, then this situation may change for you. Then you will be able to use these things to work for you as wealthy people already do but beware – Many “experts” in the field has lost fortunes by investing in these things!
The most available, safest, and the best of them all
This is what I would personally ad to the book. Two assets are totally overlooked but they beat all these types that he primarily talks about. These are: online business and work with the purpose of learning.
He actually speaks about working to learn, and that is my favorite part of the book, but he does not see it as asset. I think it is the greatest asset we all have.
How do I know that? It is simple, I used to my favor successfully so I know how powerful it is. Kiyosaki actually mentions that a profitable business is the best solution to any economic issue people face and that is what I achieved. And I did it by moving my focus on learning while I stopped working for money.
So these two assets come together cause we need to start learning about online business at some point, if we want to create a better situation for ourselves. Yes, it is challenging but extremely rewarding as well.
If you want more info about these things, study the material on this website cause it is all about online businesses and learning how to do it. If you have any inputs on the subject, leave me a comment below! I would like to hear it.
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