Without a solid financial education a person cannot tell the difference between an asset and a liability. And one of the fundamental of building a rich ark is to know the difference between an asset and a liability.
If your retirement plan has a house on the list as an asset, it’s time to think twice and get some financially education, and if your banker tells you to put on your retirement plan a house as an asset, his right it’s an asset but his just not telling you whose asset it is, and off course it’s for the banker. It’s so sad when you ready so many people’s retirement plans, a house, a car, a pension package and children if there, are the only plans they have for survival when they retire.
But for a rich person, it’s a totally different world; they believe an asset is the cash flowing business or businesses, commercial real estate, and other cash flowing investments.
If you are told you have an asset on your retirement plan and that asset keeps taking away money from your pocket every single month; then you do not have an asset, you have a liability. A liability is simply defined as something that takes away money from your pocket with or without working, and an asset puts money in your pocket with or without working. A liability feeds on you, and an asset feeds you.
Before someone retires they must be able to understand what an asset or liability is, simply because without a solid financial education most people have lost their money to those so called financial expects who are financial brokers, simply because someone could not tell the difference between an asset or a liability, and without knowing the difference between the two, financial expects capitalizes on such people’s ignorance for their own personal gain. It’s financial education that gives financial advantages.