It is not a surprise to women of any age that we think differently than men, which includes our thoughts about money and finance. This is why it’s so important …
In our schools, we don’t teach the things that people need to know to build wealth and abundance in their lives. That means too many people are stuck in month-to-month money struggles, trying to make ends meet, simply because they lack the information necessary to make simple changes that can amass wealth.
Wealth starts by first getting the understanding of assets and liabilities, and then applying that knowledge to create financial abundance. Below are personal finance insights everyone needs.
What are assets and liabilities as it applies to personal finances?
To put it simply, an asset is something that makes you money every month or something that increases in value over time, without having to trade time for dollars to get it.
Examples of personal assets are:
- Your home
- Retirement funds
- Savings accounts
- Rental Properties
- Collectables and art
- Life insurance policies
Liabilities on the other hand, are the debts that must be paid down each month. These include:
- Secured and unsecured loans
- Credit card balances
- Unpaid taxes
- Auto loans
- Payday loans
It’s good to note that bills like cell phones, rent, utilities and food costs are general expenses and not a liability.
To sum it up, assets put money in your account, whereas liabilities make you take it out to pay off a debt.
Do our liabilities determine how wealthy we are?
Wealth is the difference between the value of money and assets you own and what you owe.
When your assets are greater than your liabilities, you have a positive net worth, but if your liabilities are greater than your assets, you have a negative net worth.
You attain true financial freedom when the money you have coming in each month from your assets exceeds the amount you have going out.
What Are the Best Assets to Grow Your Personal Wealth?
This is a question I am often asked, and I love it because there are so many assets to choose from! You can buy, build and create assets.
We mentioned some assets above, like real estate (one of my personal favorites) and retirement funds. There are also:
- Stocks and equities
- Real estate investment trusts (REITs)
- Rental and vacation properties
- Angel investing
- Small businesses
Often, people tend to overlook the ways they can create assets and miss the opportunity to leverage their intellectual property or creative ideas to build wealth.
There are things that you know how to do that other people don’t, or ways you do things faster than can be a huge benefit to someone else. Those can be made into assets that other people can use to get your knowledge to make their lives easier. By doing so, you have something that you create once, and can sell continually.
Great examples are:
- Cheat sheets
- Unique processes
Just this little bit of knowledge can help you build wealth through assets, while you reduce your liabilities. Take the time to fully explore your options and the ideas you have that can generate various streams of income. There is no need to limit yourself to just one! The more assets and streams of income you have the wealthier you will be!
You can give yourself a faster path to cash by learning from others who have a proven process to build wealth. One of the assets I have created to help others is the Play Big Financial Freedom and Entrepreneurial Course. It’s designed to help you create your personal wealth plan and leverage your personal expertise to generate income producing assets, so you can be financially free for a lifetime. CLICK HERE TO GET A FASTER PATH TO FINANCIAL FREEDOM NOW!
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