Assets
So I got talking with one of my co-workers last night about investing. It is a topic I’m passionate about because I believe the path to financial freedom is through acquiring assets and limiting liabilities. In fact, this whole subprime mess is because millions of people don’t understand the difference between an asset and a liability.
One blog I read everyday is by Kim Kiyosaki, http://kimkiyosaki.blogspot.com The following is an excerpt from her Dec 30th post. Her company is dedicated to providing women opportunities to improve their financial literacy which will inturn, improve the quality of their lives. If you have absolutely no clue what investing is about, this is a good place to start.
Control Your Vocabulary
The English language has approximately 2 million words. Each of us has command of approximately 5,000 words. Since words are the fuel for our minds, one of the best things we can do is upgrade the quality of our vocabulary.
One of the first things to begin your financial education is to know the difference between an asset and a liability. One of the reasons why many well-educated women struggle financially is simply because they call their liabilities assets.
Many women struggle financially because their financial vocabulary consists of such words as ‘work hard,’ ‘save money,’ ‘get out of debt,’ ‘invest for the long term,’ and ‘diversify.’ If you want to increase your financial performance, you will need to take control of your financial vocabulary and increase its value.
If you are truly committed to becoming rich, purchase a financial dictionary and keep it nearby. Every time you hear a word you do not understand, look it up. Over time, your mind will open to a whole new financial world, filled with opportunities… opportunities that most people miss simply because they have not increased the value of their financial vocabulary. You can also look finance and investing words up here on the Rich Woman Resources page or use a website like Investopedia.com
At the most basic level, an asset is something that either puts money into your pocket every month and/or appreciates in value so you can sell it for more than it is worth. A liability is something that takes money out of your pocket every month and/or depreciates in value.
Houses can be an asset if managed properly. As we are seeing in the economy today, they can be a major liability if mis-managed. Cars are usually liabilities since they lose value when you drive them off the lot. Only after a generation or two passes do they begin to appreciate in value. Vinnie swears that the 68 Oldsmobile Tornado sitting in our garage is an asset because one day he’ll be able to sell it for a lot more than he paid for it. Until then, I call it a liability because he keeps putting time, money, and labor into fixing it so he can one day sell it. But I know when that day comes he’s going to have a big smile on his face when he tells me “told ya so!” I’m just impatient 
Many women (not just strippers) buy a lot of expensive things that they think are assets. Suppose you bought a $2000 Louis Vuitton purse in 2005, after a few good nights. Today that purse is 3 years old and I doubt you could sell it for $2000 or more on Ebay. That purse is a liability. If you bought $2000 worth of silver in 2005, you would not only have the original $2000 you started with, but also enough money to buy more than one purse.
Tags: assets, financial education, strip club, stripper