What are assets and Liabilities?

Loes Knetsch ^©

There is a huge difference between assets and liabilities. Some people think there house, car, and boat are their assets. In some cases they are right, but in most cases, those are definitely not assets. Why is it important to turn liabilities into assets?

All my suggestions here are long-term investments. It’s not a get wealthy quick method, but a method that can work out very nice for you in the long term.

Assets vs Liabilities

First, we need to understand the differences between assets and liabilities.

What are considered liabilities?

The house you live in
The car in your garage
The boat behind your house
The camper on your driveway
The jewelry in your box
Anything you own what cost you money

What are considered assets?

Real estate you earn from
Cars you rent out
Stocks
Bonds
Websites – of which you earn money
Solar panels
Windmills
Anything you own what brings in money

You don’t have to be rich to be wealthy

A lot of people think that they are rich by having a lot of stuff. But when they lose their job or when the housing market collapse, they are right away in big troubles. And when they want to sell their stuff, then they realize that it’s worth only a tenth of what they paid for it. Their stuff doesn’t make money, it only cost them money.

When your monthly expenses are about $2000 then you have to work towards a monthly income out of assets of $2000. You can say that you are wealthy when your assets bring in the monthly expenses. And you do not have to rely on your paycheck.

How to get assets when you don’t have a lot of money?

You can’t get a mortgage to buy real estate when you live from paycheck to paycheck. But there are ways to get out of this rat race. I have thought long about this and I found some great startups to invest in what can bring me money in the long term.

Lease solar panels.
Open a bank account for the stock market.
Start your own affiliate website.
Buy wind parts from your energy company.
Invent something
Write a book
Write a song or sheet music
Earn with YouTube

Wealthy people invest first and spend what's left & broke people spend first and invest what's left Click To Tweet

1. Lease solar panels

When you do not have the cash to buy your own solar panels, there are companies who offer to lease them. You pay a monthly fee of around the $50 and you’ll have an average profit of $75. An average profit of $25 a month. This will be deducted from your energy bill. After 15 years the panels will be your own. and the full profit from them too.

2. Open a bank account for the stock market

There are banks where you can get in for $ 25 a month. They offer solid stock packages. When you can spare $25 a month, you can slowly but steadily build up your stock asset. And when you are able to spare more money, you can invest more.

3. Start your own affiliate website

When you do not have a lot of money to invest, you might have time to invest. Building a website is relatively cheap but will cost time and effort. To build an affiliate marketing website you do need the know-how. It’s not just buying a domain name and get out there. A solid foundation of your website is a pre. My No #1 online recommendation for a training is Wealthy Affiliate. A Canadian business community specialized in affiliate marketing training. The online step-by-step video course is suitable for beginners and advanced marketers.

4. Buy wind parts from your energy company

Go green. Invest in a cleaner world. Energy companies are building huge wind parks to induce electricity. You can be a part of this by investing in wind parts. Most companies offer this for about $50 per part. The profit will be deducted from your energy bill.

5. Invent something

Are you a creative thinker? Then, perhaps you are creative enough to invent something new, or handy. Always ask yourself the question: “What can be bettered here?” And work out your idea from that position. You can also patent your idea or new invention. Patents can bring in huge amounts of money.

6. Write a book

Write a book, you’ll get royalties.

7. Write music

Are you into music? Write a song or sheet music for an artist. You can discuss the royalties you can get from it when it is going to become a hit.

8. Earn with Youtube

6-year old makes 11 million by testing toys. This is just one example of making IT on YouTube. When you have a great idea, you can earn money on youtube too. P.e. You do actively perform extreme sports, buy a head camera and film every parachute jump, bungee jump or wild water canoeing from that angle. I bet you get a lot of viewers!

You can say that this child is turned into an asset for his parents, but most children fell in the category of liabilities, they cost money;)

Selling liabilities to get assets

When you really don’t have money to spend on investing in assets, look around you if you can sell some of your liabilities and turn them into assets. What is in your garage, on your attic, in your clothing closet? Are there things you can do without? Sell them!

Sell everything you own, what you do not use or doesn’t earn money for you, and replace it for real assets.

Invest in yourself

The first thing you could invest in is in yourself. Learn to understand how money works. And learn about how to escape the rat race. You can read the book “Rich Dad, Poor Dad written by Robert T. Kiyosaki. This book will clear up for you everything. How the rich think, how poor people think and that wealthy people do not have to be rich. He will explain exactly what the rich teach their kids about money that the poor and middle class do not. And how you can shift your thinking about money. It’s an investment of around the $10. Anyone can afford this.

Buy at Amazon

Buy at Bol.com

Read more about your website as an asset here, it could be your way out of the rat race too.

My upbringing

I was raised in a teacher’s family. And was told, get the right education, and a good paying job, and you’ll be fine and secure for the rest of your life. There was, back then in the ’60th, nothing mentioned about what to do when you get kids, your marriage fails or because of the crises, you lose your job. You’ll sink into the social security pit and have to use all your energy to get by. I have been there, with 4 kids and no home to live in. As a single mom, I had to keep up my hand for the social assistance.

I fought my way out of it, and I decided I never will be financially dependent on anyone! So, I started up my affiliate websites. At the time I really didn’t know anything about websites and affiliate marketing. I started the online course of Wealthy Affiliate. Everything you see on this website, I learned in the course and from the courses that members are sharing on the forum. My websites are turning into a liability right now by bringing in some monthly money, and I am working towards a steady amount of money on a monthly base, so I can say: