Where do we start?
At the beginning.
What is an Asset?
So if you Google this question see below the results
According to Investopedia, you can see that an asset is anything of value or a resource of value that can be converted into cash. Individuals, companies, and governments own assets. For a company, an asset might generate revenue or the company might benefit in some way from owning or using the asset.
When discussing what personal assets are cash and cash equivalents, investments, personal property, and property and land. Personal property is also included such as cars, boats, jewelry, etc.
Well I like Robert Kiyosaki’s simple definition is anything that puts cash into your pocket. A liability is anything that takes money out of my pocket.
When we look at the definition when I hear something that puts money into my pocket means to me that it is happening without me having to sell the asset…Why?
Because, if I sell the asset to “convert to cash” guess what I don’t have anymore….the asset. So how does this benefit me?
What needs to be understood is what is the purpose of your asset? Why do you have this asset? Or why do you want this asset? Do you know what the rules and life cycle of your asset? Do you know how the asset performs in what we call the Economic Termites events?
If you don’t know the answer to any of these questions then you shouldn’t have that asset.