Alexander Gerchik
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Alexander Gerchik in Alexander,

Assets and liabilities

Robert Kiyosaki, an author of Rich Dad, Poor Dad, became famous for a simple idea. He pointed out that some of our deals help to increase our prosperity in future, but other deals do otherwise.

For example, if you're “lucky” to buy a used car, then you will understand soon that it takes more than it gives: repair, extra petrol, accidents caused by the failure, more expensive insurance. This is a liability.

On the other hand, purchase of an "extra" apartment can be very lucrative. You can rent it and its price constantly increases. And all the costs are paid at the tenants’ expense. It is an asset.

Business that takes all your effort, money and time, balancing on the verge of recovery is a liability. But if you are able to arrange things so that profits grow, and you are engaged less and less, then you get an asset.

As Kiyosaki noted, most people who start to earn more, immediately charge themselves in the next load of liabilities: buying on credit, investing in half-dead business, a growing number of "freeloaders" ... So, he proposed a simple and genius idea: you should invest into assets and get rid of liabilities.

And I agree with him.


Money is the most vivid example. If you earn USD 1200 per month, but pay USD 400 rent, USD 270 loan for your own apartment, USD 135 loan for plasma TV and give USD 320 to a babysitter, you have only USD 75 left. Great, isntit?

The funny thing is that if you start to earn USD 2400, you will want to invest USD 800 to promote your own businesses, pay a USD 400 loan for a new car, and all you get is the same amount of USD 75.

Oh, I almost forgot! If you find yourself temporarily unable to work for some reason, USD 2325 will still be deducted, and the next month, and the next as well. According to Kiyosaki, it is very typical of America: if you lose your job, you automatically lose most of the benefits acquired, because you cannot pay taxes, rent, loan commitments, etc. We are rapidly approaching this model.

On the other hand, if in addition to paying for your aggressive activity that requires your direct participation, you regularly receive at least USD 135 for advertising posted on your site, USD 55 for the use of your invention, USD 80 for a regular customer you have attracted, then now you have USD 270, even if you do nothing this month.

And the best thing is to get a taste of the assets, doing this you will invest into them more and more. And in a couple of years of work only on assets, you would get, for example, USD 540 without your direct participation.

Therefore, I agree that you should invest more into assets and get rid of liabilities.

Not only money

Money is a convenient resource to calculate, but not the only one. Therefore, we can apply the idea of assets and liabilities to other types of resources. It may be, for example, health, energy, contacts, knowledge, skills, time, reputation... Every step we make will either increase or decrease quantity of our resources. Every decision we make create either an asset or liability, which will inevitably affect our future.

Here are more examples.

Create well-wishers. Let more and more people want to do you good. Let there will be no one who wants to harm you. Try to do so that people benefit from cooperation with you and don’t forget about your own advantage.

Don’t fight against something, fight for something. Don’t destroy, build instead. Any war is unprofitable, especially prolonged one. Cooperation is always useful. Don’t invest your resources in a defeat of someone else, mind your business. Create!

Alwaysfollowtheagreements. Or just disagree at once. Do if you agreed to do it, then people will want to deal with you in the future, and you will also get everything which was agreed.

Think not only about money when choosing a job, but about all other opportunities that you will get, i.e. information, communication, experience, skill, reputation, atmosphere... Sometimes a job is not as profitable as it promises to be, and sometimes you receive only money. Prospectsaremuchmoreimportant.

Take care of your health, think before you put or pour something into your mouth. How will your body cope with it? What’s the price? What will be the result in a decade? Stop poisoning yourself, eat properly. Juice is better than cola, fruit is better than chocolate bar, vegetables are less caloric than meat. Itsobvious.

If you lose don’t lose the lesson. Ask for feedback. Then the number of mistakes will be less and the results will increase. Old age is the time when self-confidence is more important than the result. Stayyoung. Changeforthebetter.

Make right first impression. Create a reputation. All these will work for you for years, because human opinion is inertial.

Surround yourself with successful people. Surround yourself with loving people. Communicate with those who you like and who you want to be like. Create an environment that will help you, lend support, show right direction and true example. Keep those who will prevent your development and pull you the wrong way.

Do not lie. Otherwise, you'll have to memorize what and to whom you said, i.e. you should spend extra resources. Moreover, lie is a time bomb laid under relationship with a person or organization. Honesty is more perspective.

Finish the work you started. You can get back what you invested only when you will finish the work and achieve the result. Otherwise, investments are suspended, and regret approaches, belief in yourself is reduced ... So, you’d better finish all the things started. Maybe the result will be negative, but it will be result at least. .

Don’t drag out problems, don’t rip up old wounds, think constructively. Think about future results, necessary means, ways to achieve your goals, new possibilities. Positive thoughts create the right mood. Negative thoughts slowly kill. Thinkconstructively.

Expand your comfort zone. Learn new things. Learn. Improve your skills. Explore the unknown. Then you'll be able to feel confident in a variety of circumstances. Choose your expansion strategy! Because otherwise you'll have to sacrifice, even those that you already have, and development skill will be lost.

Think in advance.

By calculating the ratio of assets to liabilities, you can predict the future. By changing this ratio, you can change the future. Each liability brings you closer to the crash. Each asset is a foundation for future prosperity.

Sometimes immediate benefit seems so attractive that it is tempting to pay for it with another liability. You want to quickly calm down, here is a cigarette. You want to snatch the jackpot, a person offended appears. You are scared to take a chance and you work until retirement at the same place. If you are lazy to do sports, the organism will reciprocate.

Stop! Think where it will lead.

Stop creating liabilities. Think in advance and invest in assets.

Learn, build relations, create additional sources of income, look for ways how to get more by investing less, take care of reputation, think constructively - this is what will work for you for years.

Take care of the future, and it will take care of you.