There are two kinds of things in this life. There are liabilities and there are assets. Now, obviously we want more assets than we do liabilities. Liabilities can be any kind of expense in our life. These are things that push us closer and closer into debt for things we may not need in our lives. Notice I said the word “Need”. I would love a brand new car but to do so I would be creating a new liability for myself. In reality my old car works perfectly fine and is paid off. That is a huge asset for me and a huge savings each month.
Our main financial goal in life is to build as many assets as we possibly can while eliminating the unnecessary liabilities. In this post I want to explain my theory for living life a different kind of way by building assets to fight off you’r liabilities. Essentially, we want to build an income generating asset solely to battle(or cover) our financial liabilities.
Let’s say you want a brand new car but the thought of a new car payment of $300 does not get you very excited. So instead of biting the bullet and taking on another liability you could build an asset to pay for that new car….. Make sense?
Let me delve in a bit more.
Basically want you would want to do is build any form of new income only to pay for your new car. Remember, we only need something to make us $300 a month for us to purchase a brand new car without us actually having to pay for it. So how could this work? You can use any form of income to make this happen. Some have gone as far as renting out their brand new car to others on the weekend to help cover the monthly payment. I personally wouldn’t be to willing to rent out my brand new car, that’s my baby fella! Perhaps you have some writing skills and wouldn’t mind starting a new blog to write down all of you’r ideas on a specific subject. Given some time, you would be able to grow you’r blog into it’s own form of income which in return would pay for that car.
Now using this theory you can create a new asset for each liability in your life. Essentially you can eliminate every single bill. Not really digging you’r rent? Build an asset to cover it!
I want to here your thoughts on this concept and how you would go about building an asset to pay for a new car or anything in life you have wanted for a long time. Leave a comment bellow and let me know what your thinking!