SPOTLIGHT – OUR EDITORIAL
Is your Car really an asset or it’s just a liability?
Think about it, automobiles today may have transitioned from luxury to a necessary means of commuting. This means it is more likely to be an asset instead of a liability, right? …right? Sorry to burst your bubble, but it might not be an asset for most people. Before we start classifying which of our belongings are assets, we have to truly understand this; what are assets and liabilities? You would be really surprised how the wealthy would classify them.
So in Accounting 101, we learned that assets are simply something that is owned by a person, company, or organization. This simply tags property as assets since they undeniably hold value. However, the rich and wealthy have a different perspective when defining assets and liabilities.
I once had the opportunity to have a discussion with the Chief Executive of Stanlib Investments Management Limited, on finance. Considering his position, he has dealt with so many wealthy men in Africa, who sought to invest their millions of dollars. When it came to assets and liabilities, the wealthy shared a similar definition.
“Anything that brings money in, is an asset. Also, anything that takes out money is a liability” I’m not going to lie, I thought the same way you are thinking now. It sounds like a really vague definition. Regardless, I still made that sink in for a little while but it was so obvious I was lost considering my obvious look of confusion.
“You are lost aren’t you?” he asked. I stuttered a bit in my reply, but then he cut me off saying “Look don’t think too deeply about it. You drove here so I’m just going to use your car as an example.” That’s when he threw this thought-provoking question; “Is your Car really an asset or it’s just a liability?” That’s when it hit me…
Cars are very relatable examples since it’s one of the most common properties in our world today. They can be either tagged as Assets or Liabilities. As a liability, they take out a lot of money from our pockets for fueling and everything concerning maintenance costs. As an asset, our cars take us to our workplaces to gather more work time for productivity.
Or, it could simply be a service car like an Uber which brings direct income. Vehicles are sufficiently strapped with qualities of an asset and a liability, so all you have to do is to weigh out both options to find out if it’s strong as a liability or an asset. – Does it bring in more money than it takes out?
The wealthy are critical with this principle in regards to owned property. They do their best to make most of what they own, serve as assets instead of just “property”. It is a simple principle to apply in your financial life if you wish to be not just rich but wealthy.
So, I’m going to directly pose this question again but this time for you to ponder on. Is your car really an asset… Or it’s just a liability?
You deserve to reach the right audience. Get quality exposure today at peanut prices.
Were you informed by this article? Have friends or relatives who might also be interested? Share this with them! Also subscribe to our YouTube Channel for more of People and Business. Don't forget to follow us on Twitter and Facebook.
We might as well tell you ...
… since you are here; can you do us a small favor? People & Business Media website is totally free to use, and an increasing number of people are reading People & Business daily. They depend on us as their source and resource for trustworthy information.
However, advertising revenue needed to effectively run this site without a paywall, like many other top media sites are already doing, continues to decline (mainly due to increasing use ad blocking tools). We want to keep this media site as free as possible so that our readers at all financial level can continue to have unhindered access. Do you now see why we need to ask for your kind support?
People & Business Media journalism and publishing activities takes a lot of time, money and hard work to produce and complete. But we do it because we believe in the power of business in a capital economy, and we are also a major sponsor of WealthBankers Foundation who is committed to combating unemployment and promoting business and entrepreneurship across the world.
"I don't want to mention names but I'm always disappointed whenever a paywall comes up on some of these other large media sites preventing me from completing that very important article I was reading. I'm so glad People & Business Media does no such thing. If not, people like me who at the moment can not pay a monthly fee won't be able to use large trustworthy sites like yours. I will contiune to contribute to support this site to remain free for others like me. Thank you."
See, if every reader who finds our site helpful and reads it, helps fund it - by patronizing our services or making a contribution, we will stand on a surer footing as we continue to dedicate valuable time, money and resource to keep being helpful. So for as little as $5, you can support People & Business Media as we in turn support others – and it takes just minute. We really appreciate your act of love. Thank you so much.