Insights on Robert Kiyosaki’s Guide to Investing – Chapter 16

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I have been into another set of events that interrupted with my writing plans as well as to the the good reads I have been reading from good writers here on WordPress. I do not even know now how will I attain my target of finishing giving insights on all chapters of this book until before Christmas and review another book that I am planning to read during the holidays.

With the title “Financial Literacy Made Simple”, I felt like my academic years spent in finishing my degree in Accountancy has been taught in a simpler manner by Mr. Robert Kiyosaki. He did not only taught a simpler way on reading financial statements but he also made me realize a lot of good things that I need to know when it comes to money.

Even though I am a graduate of a business course, Mr. Kiyosaki never fails to amuse me on how an entrepreneur must think as against to what most people think. The way he defines what an asset and liability in real-life is an eye-opener for me because what was mostly classified as assets accounting-wise might not really fit its classification as asset.

A house or real property would be easily classified as an asset for accountants and most individuals because it has something of value but for the author, it more suits the definition of a liability for the very reason that it does not bring in money or income to the owner but rather expenses in the form of taxes, licenses and insurance.

From that example, I have learned that not all properties that gives entitlement to a person does not necessarily form part of his assets. A personal car of an individual was mostly classified as an asset but it only brings in expenses in the form of gasoline, parking, registration and insurance.

Though a house and a car may be a liability for the very reason that they bring in expenses instead of income, they could possibly be converted or fit the definition of becoming an asset if the owner makes use of the property and earn something from those properties. If he decides to lease a part or the whole house he got, he easily converted his liability into an asset. The same goes whenever a car owner rents his car or picks-up various people to transport.

If only a lot of people would realize those things in managing their financial life, I do believe that more and more people would live with financial freedom. The problem with most people nowadays is that they would buy a lot of liabilities that upon they retire, they would realize that their investments in the form of liabilities would not give them any monetary benefit in the form of income.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:
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