Assets- This is everything that can generate money. And the liability, accordingly, is everything that takes away this money. According to many economists, in order to become rich you need to get rid of liabilities and acquire assets. Yes, it's a simple formula, but if you look at it, that's how it is.

Many people who are not at all familiar with the economic topic often confuse these concepts, but if you look into it, it is not at all difficult to understand their differences, because these are completely opposite definitions.

In order to answer the question of how to acquire assets, you need to understand for what purpose you need to attract them to yourself, and, on the contrary, move away from liabilities as far as possible.

In simple words, we can say that an asset is the generation of cash flow, that is, the sale of what you have.

What can be an asset?

The following things can act as an asset:

• Bank deposit;
• Property that is leased;
• Securities;
• Other items that are rented out for profit include cars, personal items, and clothing.

But the car and the apartment where you live are a liability, because you invest in these things yourself, take care of them and spend money on their maintenance. And, for example, if you use your car as a taxi driver, then it acts as an asset. Passive– this is something that can take away money.

Below are some tips on how to how to acquire assets. If you chose real estate as an asset, it is best if these are foreign assets from which you can get higher income. You just need to approach the choice of country wisely; it is worth remembering that it must first of all be economically developed. If you learn everything from you, then you can receive rental income of up to thirty percent per year.

If you don’t have enough money to buy a home, you can also buy it on credit by cooperating with banks in other countries; in practice, it shows that there are more favorable offers for clients there. But if this option does not suit you, then you can purchase real estate under construction, and when the time comes, sell it at a profit.

Developing companies will bring good income, but you just need to first study this area of ​​the market.

If you want to work with assets, but do not have the opportunity to purchase them, you need to start saving for them. Each salary needs to be set aside ten percent to invest assets. At first glance, this may not seem profitable, but in practice it brings good income.

It must be remembered that only those who invest large amounts of money in them can earn big money from assets.

Anyone should gain as much knowledge as possible about how to profitably buy assets and limit their liabilities.

The video below shows what they are.

Let's talk about another fundamental and very important topic - assets and liabilities. If you have read Robert Kiyosaki, then you will understand me perfectly - there is an opportunity to refresh your knowledge, remember what you once read, think and start acting (if you haven’t already).

Definitions of asset and liability

According to Kiyosaki's definition:

• an asset is something that puts money in your pocket
• liability - everything that takes money out of your pocket.

This leads to an important rule: you need to acquire assets and get rid of liabilities. The statement is so simple and even banal that one may not even pay much attention to such a “trifle.” However, today we will look at this in more detail, because there is a lot hidden in this simple phrase. Rich dad told young Kiyosaki that this is all you need to know to become rich.

But, as we know, the devil is in the details.

You need to clearly know what is an asset and what is a liability. Very often people confuse these concepts, mistaking one for the other.

Assets - something that brings money into your pocket, that is, generates cash flow (cashflow). Or it’s something that you have and that in the future you plan to sell and get more money for it than you spent.

What can be an asset?

1. Real estate, rented out - it generates cash flow for its owner.

2. Stock that you bought for a long period of time (buy&hold strategy - buy and hold) - in addition to the fact that dividends on shares are periodically paid, over long periods of time, a portfolio of shares of successful companies grows in price, which means that in a year or 5-10 years the shares can be will sell and make a considerable profit.

3. Any other things, rented out and bringing money to their owners (for example, a car, equipment).

4. Shares mutual investment funds (UIFs)

5. Deposit in the bank

However, the house (apartment) in which you live is NOT an asset, as many people mistakenly believe, because this housing does not bring you profit. On the contrary, you pay the rent and buy furniture. Therefore, in this case it is a liability.

Also, your personal car is not an asset, since it not only does not bring in money, but also requires maintenance (gasoline, repairs, fines, etc.) - it is a liability. However, if you rent out your car and receive money for it, or, say, work in a taxi and earn money using your car, then this can be considered an asset.

Liabilities - something that takes money away from us. For example, we pay for the apartment in which we live. We spend money on gas and maintenance on the cars we drive. We pay interest on bank loans. All these are liabilities!

Balance sheet

However, it is not possible to completely get rid of liabilities. Or you will have to greatly reduce your standard of living (how do you imagine living without housing?) The trick is that you need to maintain a reasonable balance between assets and liabilities. That is, you don’t need to strive with all your might to acquire all sorts of luxury items (liabilities) that will drain money from you. If you look around, you can see a lot of people who do just that—live beyond their means. On the contrary, you need to know when to stop and not get too involved in the financial bondage of loans.

A financially smart person will tend not to increase his liabilities (as most people do), but rather to reduce them and acquire assets because he is confident that the assets will make him rich. Look at the billionaires - they are all owners of shares, real estate, enterprises, factories, oil rigs - these are all assets, though on a different scale. Assets allow you to achieve financial independence, when it is no longer a person who works for money, but money that works for him. By acquiring assets, we are getting closer to no longer working for money all our lives - the time will come, and our assets will work for us and provide us with a comfortable existence.

Of course, rich people can afford to hold liabilities in the form of a country mansion, a prestigious car, but this is due to the fact that income from assets allows them to do this without damage.

If, among your assets, you only have a hired job, and among your liabilities, you have taken out loans, it is worth thinking about where, in which direction you are going, towards wealth or in a vicious circle of poverty “earned - spent”.

Assets generate income, liabilities generate expenses.

Do you want to get rich? Just don’t think about how to live from paycheck to paycheck, but know for sure that in any case, a certain amount will arrive in your bank account every month?

Then you will have to take a short course in applied accounting for home use and figure out what your individual assets and liabilities are, what makes a person richer, and what invariably leads to poverty.

Introduction

Any balance sheet consists of two parts: assets and liabilities. But we will not deal with the intricacies of accounting, we will understand one thing for ourselves: an asset is something that brings profit and a liability is something that takes away profit, i.e. your money.

In relation to your own wallet, you can say this: sources that generate income (various types of business, salary) are an asset, and sources that require spending (utility payments, car insurance, loans, taxes, etc.) are a liability.

Robert Kiyosaki described this concept very well. The table below clearly shows what brings in income and what takes it away:

A simple diagram by Robert Kiyosaki showing us how the sources of assets and liabilities influence.

But money can also get into your wallet in different ways. If this is borrowed money, then we will have to pay it back, and sometimes even with interest. Then it is no longer an asset, but a full-fledged and burdensome liability. Managing your own cash flow is the main task facing a person who wants to achieve sustainable wealth.

How to create an asset

Your assets can become.

• and purchase
• PAMM accounts
• Business, etc.

Financial literacy

Even at the most basic level it can help shape the worldview of a wealthy person. But a rich man really thinks differently. His thought is not aimed at spending what he has accumulated and buying another yacht. He is puzzled primarily by increasing his capital, which will bring profit.

In order to live without any special need, you need to keep your assets and liabilities in a state of balance. Try to make a list of your own assets: most people may only have one number in this column - their monthly salary. But the liability will be overloaded. There will be utility bills, expenses for maintaining yourself and your family, debts, and loan payments.

Your damage from external circumstances begins when the asset column begins to increase and the liabilities decrease. And here the point is not to increase the number that indicates monthly income in the form of salary. It is important to increase assets in quality and reduce liabilities in quantity. No matter how boring it sounds, but you need to learn how to wisely save the money you receive. And instead of unreasonable and unnecessary expenses, invest money in acquiring assets.

Ideally, assets generate income for their owner without his participation. For example, you put money on a deposit. The bank charges you interest; your participation in generating income ends with the procedure for making the initial deposit. Then the asset is formed independently. Subsequently, your management of the created asset can continue in the direction of increasing it: you can replenish your account, transfer money to a deposit with more favorable interest rates, withdraw money and invest it in stocks, gold, etc.

This way your “active” column will multiply and diversify. The day will come when you won't have to worry about losing your paycheck. The previously invested money will work for you. And if you continue the process of investing money in profitable financial instruments, you can consider yourself a wealthy person.

Below you will find several useful articles that will help you take the first steps towards financial independence:

So, what are the differences between the rich and the poor? Rich man:

• Constantly trains the mind to develop new ways to make money from money.

• He is not afraid of healthy risks when investing money, takes advantage of every chance that arises, and believes in a favorable combination of circumstances.

• Practices constant self-discipline in spending funds.

• Focused on the goal of increasing one's own assets.

• Invests money profitably, prefers planning for the future.

• Does not seek immediate benefits.

Conclusion

To achieve sustainable wealth, it is not enough just to learn how to make money. To reduce the share of liabilities in your balance sheet, you need to learn constant self-control in spending and spend money so that the liability turns into an asset.

For example, you decide to invest money in real estate. If you use it personally, then, despite such a seemingly significant purchase, indicating the availability of finances, it will be a clear liability for you. After all, you will have to pay for the maintenance of the apartment, utility bills, and make repairs from time to time.

And if the same purchased apartment will be used for rental, and the amount of monthly income from its rental exceeds the costs of maintenance and operation, then the apartment can be recognized as an asset, because you receive income from owning this property.

In conclusion, I would like to give some practical advice on mastering the skills of a rich person.

• Learn to manage your money.

• Communicate with wealthy people and observe their financial mentality, learn from them.

• Master financial literacy.

• Be willing to change your money habits and break down the psychological barrier that separates you from wealth.

• Constantly strive to reduce liabilities, avoid debts and loans, and control unproductive expenses.

Absolutely all successful people on the planet have their own assets. This is one of the best ways to earn passive income by investing a certain amount of money just once. An asset is essentially a money generator that works around the clock without the participation of an investor. An asset makes money regardless of what its owner does. How to acquire assets in our country if there is no start-up capital?

Assets can vary in value, so you don’t have to immediately count on purchasing a three-room apartment. You can start with small investments, gradually increasing your savings and acquiring new assets.

Popular assets

• Real estate. The most common and highly reliable asset that consistently generates passive income. To acquire this type of asset, you need an impressive initial capital.
• Stock. Having knowledge in the field of investing in shares can acquire profitable assets. The stock market is developing every year, so it has good prospects for acquiring new assets.
• Share in business. Large businesses often have several founders who control their shares of the company. With good organization and management of the company, you can receive passive income from your share in the business.

Management

Small investments can be initially deposited in a bank at interest. A bank deposit is also an asset that can be used profitably. Having a good amount in your bank account, you can receive passive income for life. It is better to invest deposits in different banks and in different currencies.

For novice investors, the first purchase may be a garage in a cooperative. This asset is not so expensive compared to housing, but brings a stable monthly income. Having several garages in a cooperative, the investor will receive passive income while minding his own business.

Having a certain starting capital, many people begin to acquire real estate assets. This market is full of offers from which you can find profitable options for investing your funds. Renting out real estate will allow you to receive a stable cash flow.

You can purchase assets without having initial capital. Purchasing real estate on credit for subsequent rental can be an excellent way to generate passive income. You just need to approach the choice of real estate wisely and find a favorable loan offer.

Calculate your strength if you buy real estate on credit. Otherwise, the asset may turn into a liability, which will suck money from the investor. Do not make risky transactions, purchase only reliable real estate options that you can immediately rent out and start earning income from them.

Set aside 10% of your earnings from all your assets and invest them in other liabilities. This will allow you to increase your turnover every year by acquiring new assets. In just 3-5 years, passive income will increase significantly.

Question: The cost of repaying the loan is higher than the cost of renting a home, how to acquire assets in this case?
Answer: This seems only at first glance. You need to know the market value of rental real estate and build on this figure when consulting with a bank regarding a loan.

Question: Can a bank deposit be considered an asset?
Answer: An asset brings in additional money; a bank deposit also increases money.

Question: How to purchase assets abroad?
Answer: If we talk about real estate, purchasing it abroad or taking out a loan is quite simple. Banks are loyal to investors in our country and provide favorable interest rates.