Wealth principles

The difference between an asset and a liability

Income statement and balance sheet examples

Examples of assets

  1. 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.
  2. Stocks
  3. Bonds
  4. Mutual funds
  5. 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.
  6. Notes (IOUs)
  7. Royalties from intellectual property such as music, scripts, patents
  8. Anything else that has value, produces income or appreciates and has a ready market

Cashflow Quadrant

Money lessons from Robert Kiyosaki

Source: Rich Dad Poor Dad and Cashflow Quadrant by Robert Kiyosaki