The knowledge of Asset and Liability that you apply to your daily, monthly or yearly spending will deliver unto you financial freedom.
One of the foundations for success and progress is knowledge, this is aspect of life that no one can do away with, and whatever you are doing without adequate knowledge may not give you required results.
How will knowledge of Asset and Liability grant you financial freedom?
Asset:
Whatever you acquire with money that does give you money back in return or helps you to reduce your expenses is simply asset.
Assets makes you to have more money either short, medium or long term.
Liability:
Whatever you acquire with money that does not give you money back in return or that still takes money from you is simply a liability.
Liability drains your bank account and if you continue in that path you may end up not having enough money left.
Therefore you need to know and monitor how you are spending your money, work to acquire or invest more in assets than liabilities and let the income from your assets be the channel that finances your liabilities.
Contributor:
Williams O. Payne
When you borrow money for an investment, is it a liability or asset? These two words changes in terms of usage. An asset can be a liability and a liability can be an asset depending on the accounting colunm. Thanks
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