Asset and limitations

The difference between assets and limitations

An asset is something which pays you money while an asset is something that costs you money.

So lets look at some examples.

Is character an asset or a liability?

Some people may say it is an asset because it is something you own, however, if you owe money on that character and are not getting a return on it then it is a liability because it is costing you money.

Is it an asset if you are receiving rent from that character?

Only if you are making a profit.

Some people would not agree saying, The character is increasing in value over time.

Lets not forget there are rates to pay plus maintenance costs and insurance to pay on that character so it could be costing you money in the long-term but you will have to sit down and do your homework.

Other investment times are less complicated such as the proportion market so lets look at other investment types which are assets.


Your retirement fund

Mutual Funds, also known as managed funds

Other investments

Business or farm

Learn to invest your money in items that can be quickly converted back to cash; some investments do not allow you to quickly turn the asset back into cash without jumping by several hoops.


Any items which have money owed on it and these are your form of transport, however there are circumstances where it may be an asset such as if the means is used as a taxi, which consequently makes it an asset as it is producing an income. Such costs and the money owing on the means can be tax-deductible. The same applies to any means used in a business.

already though a means used for work and business purposes may be classed as an asset, the money owing on that means is a liability and will go into the accounts as such.

The reason why so many people are in such a poor financial state is that they borrow for stuff instead of saving for it and consequently pay more for that item in the form of interest payments.

A pet can be classed as a liability if it is costing you an arm and a leg to keep. Think of a dog for example; I read somewhere that it costs $20,000 to keep a dog during its lifetime. That is not just the food but vet bills and the like. A dog can be classed as a liability.

Do a stock take

Before you know where your money is going you need to do a stock take of all your spending.Your number one priority has to be the elimination of debt and plug up those leaks in your spending that are costing you money. In this way you will know where to make savings and redirect that money in other places.

Your task needs to be to reduce limitations which method reducing debt then once you have savings use it to build your wealth. This involves setting goals which will increase your wealth and not send you to the poorhouse.

There are a number of proportion market platforms where you are able to drip satisfy money into the markets. Take advantage of these as they are a great way to build your financial literacy.

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