The Difference Between An Asset and a Liability

In my opinion knowing The Difference Between An Asset and a Liability is the deciding factor in how much wealth a person is going to make or create in this lifetime. Assets and Liabilities are decided by the person. Asset and Liability is based on how you view the two. So for a topic like this all i can do is give you my insight on the difference between the two.

I consider an Asset something that is going to make me money for years and years to come without me physically having to be there to do the work. An asset in my mind is something that i invest in that will create money on top of my investment. An example of this is if i invest $5 in something that something should turn into $50 an continue to through of wealth.

I don’t consider myself a risk taker so understanding the difference between an asset and liability is very important to me. To me having a Job is liability if i am not using some of the money from the job to buy assets. As a person who doesn’t like taking risks i find working for someone as an employee to be very risky business. My reason for this is because as an employee i am dependent on a employer to provide me with income. If that employer decides to close his or her shop i am left with nothing and i may even have to start all over.

Also i consider a job a liability because more times that not and this even includes sales jobs i am limited to how much money i can make or how much wealth i create within that company. So the only way for me to create wealth is with after tax dollars.

In general an Asset is something that makes you money and Liability is something takes money out of your pocket. An asset is suppose to make you more money than you spend on that particular item. If you buy something for $5 and sell it for $3 the item you bought for $5 in my opinion was not an Asset. it may have had value once you sold it but it didn’t appreciate in time. I would like to hear any one else’s opinion of an asset verse a liability please leave your ideas below