Robert Kiyosaki mentioned in his book “Rich Dad, Poor Dad” that assets put money into your pocket while liabilities take money out of your pocket.
It was with this in mind that I started to acquire more of these assets (e.g. stocks) instead of frivolous stuff like clothes, accessories, electronic devices and stuff.
These stocks I own have been paying me quarterly and yearly dividends. Thus, they have been putting money into my pocket over the years.
However, two stocks that I have recently declared “rights’ issue. For the uninitiated, that basically means that the company is issuing me with more shares and I have to pay for them if I intend to exercise my “rights” or either forfeit them and see my shareholdings in the company diluted.
What an irony. These assets are now taking money out of my pocket! All the dividends that I have earned from them are like useless.
If they are so cash strapped, why did they even declare dividends in the first place over the years?
Didn’t they foresee this coming? Why weren’t they more prudent in calculating the amount of dividends that they were giving out over the years?
So now instead of owning assets, I am like owning two businesses which are asking me to pump in more money into them. I can’t tell whether these are assets or liabilities just yet.
*Big Sigh*
Read more from the original source:
Aren’t My Stocks Supposed to be Assets?
all…,
Another thing that we have to understand (from KIYOSAKI) is 2 types of investment.
Aiming for CASHFLOW and/or for CAPITAL GAIN.
Invest on Paper Asset is aiming for Capital Gain. The problem is we have no CONTROL because price is driving by MARKET.
In your case, your stock is Liability.
While for your biz.
If you still pump in cash to your biz, means your biz have no profit/margin.
In your case, your biz is Liability.
To understand well which one is an Asset or a Liability, we have to have a Financial Statement (FS). This FS will show us which one is an Asset (create Income) and which one is a Liability (create Expenses).
Question:
is a rental PROPERTY is an Asset or Liability..??
If it is rented, so it is an Asset.
If it is not rented, so it is a Liability.
The Property is still a Property.
But it can be an Asset or a Liability…!!!
please correct me n hope it is useful.
rgds,
BUDI Rachmat
the implementer of Robert Kiyosaki’s strategy to Rich n Wealth from Jakarta, Indonesia.
follow me at Twitter @ http://twitter.com/budi_rachmat