From CASH FLOW QUADRANT: People with no assets that generate cash flow are likely to have tomorrows that are filled with struggles and stress. When I find eople who have no assets, they are usually working hard for a paycheck to pay their bills. If you look at most people’s expense column, the two biggest monthly expenses are taxes and debt service for long term liabilities. In other words, the government and the bank get paid before YOU do. People who cannot get control of their CASH FLOW generally have no financial future and will find themselves in serious trouble in the next few years. Why? A person who only operates in the EMPLOYEE quadrant has little protection from taxes and debt. Even a SMALL BUSINESS can do something about these two financial cancers.
Cue Downward Spiral.
What’s an Asset?
An Asset is something that puts money in your pocket. The straight juice (stocks, royalties, intellectual property, fine art, profitable real estate, etc)
A Liability is something that takes money out of your pocket. Believe it or not, the first house or the second bigger house you buy is a LIABILITY not an Asset. Don’t be a Victim of Middle Class/Poor People Thinking!
More info on allocating Assets in the next couple days!