Financial Freedom 101 : Liability vs Asset

A lot of people seems to misunderstood the meaning of liability and asset. Here's what I think of what is a LIABILITY and ASSET:

LIABILITY- something that you'll be held liable if you're not able to pay-up. (eg: house you're staying, car, credit, mortagages)

ASSET-something that would be able to self-sustain or increase in value, or in layman term, CASH MACHINE. (eg: rental yield from real estate properties like shophouses or residential, intellectual property rights, royalty from copyrights, self-sustaining business).

To gain financial freedom, one should always acquire as many asset as possible and reduce liability to minimum level.

A lot of ppl seems to think that the property they stay on is an asset. It is in fact a LIABILITY! Just imagine that if you got retrenched tomorrow, how're you gonna pay your mortgages?

An ASSET, (eg: a shophouse rented out) on the other hand is able to stand by itself even if you got retrenched as the rental fetched would be able to cover the monthly installments. Even if the shophouse's rental is just enough to cover for the monthly installments, the rental yield will certainly increase over the years and indirectly, your ASSET is working for you. This is a good example of how to make MONEY WORK FOR YOU!

In other words:
LIABILITY- You will never stop working for money, and it'll still be not enough.
ASSET-The money will work for you, the more you acquire an ASSET, the harder it works!

Friends, do ponder and challenge the thought...

A Lesson From Robert Frost

The Road Not Taken
Two roads diverged in a yellow wood,
And I sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in undergrowth;

Then took the other, as just as fair,
And having perhaps the better claim
Because it wa grassy and wanted wear
Though as for that the passing there
Had worn them really about the same,

And both that morning equally lay
In leaves no step had trodden black,
Oh, I kept the first for another day!
Yet knowing how way leads onto way,
I doubted if I should ever come back.

I shall be telling this with a sigh
Somewhere ages and ages hence;
Two roads diverged in a wood, and I-
I took the one less traveled by,
And that has made all the difference

Robert Frost[1916]

Bumpy Road Ahead...

Pals,
bumpy road ahead and the end is nowhere in sight...
be prudent and spend smart...

as my previous posts in Opportunities mention,
don't stop adding value and keep on looking out for opportunities...

Opportunities....

In this hard time, i believe everybody feels depressed, questions like:
1. Will I still keep my job?
2. How bad will the economy goes?
3. How am I gonna afford a new car/house?
...... questions will remain questions. Nobody will know how bad will the economy goes,
nobody will know whether the company decides to retrench you or me....

In this uncertain time, I believe in looking out for opportunities and adding value to ourself. Instead of whining of how bad the economy is, why not think of building some small business as a supplementary income? If you've the talent and creativity that the market demands, there would sure be a demand for your product/service.

Adding value would include learning a new trade/skills that would make us more valuable and able to withstand any challenges that come along.

To all my friends, in this uncertain time, don't stop learning and looking out for new opportunities...just keep the passion of living and learning in you burning!

STAY STRONG!