The difference between an asset and a liability
Income statement and balance sheet examples
Examples of assets
- Businesses that do not require your presence. You own them, but they are managed or run by other people. If you have to work there, it’s not a business – it becomes your job.
- Mutual funds
- Income-generating real estate. This must be fully managed to qualify as an asset – if you’re self-managing it’s not an asset – it becomes your job.
- Notes (IOUs)
- Royalties from intellectual property such as music, scripts, patents
- Anything else that has value, produces income or appreciates and has a ready market
Money lessons from Robert Kiyosaki
Source: Rich Dad Poor Dad and Cashflow Quadrant by Robert Kiyosaki