Focus on assets, limit liabilities

The key concept exposed by Robert Kiyosaki is the difference between assets and liabilities. Robert Kiyosaki explains that many people make the mistake of focusing on liabilities.

As offer a quicker pleasure that is hard to resist.

However, by doing so, you will create financial constraints that lock you into a vicious circle. The more liabilities you have that cost you money, the more you will be locked into your 9-to-5 job, and the less likely you are to leave the so-called Rat Race.

The Rat Race is the vicious circle in which you will be stuck as long as you focus on instant pleasures in life. To pay for these pleasures, you will have to keep working harder and harder. Your time will constantly be exchanged for more money.

To get out of this vicious circle, you will have to make your money work for you. Remember what Warren Buffett says about this:

“If you don’t find a way to make money while you sleep, you will work until you die.”

— Warren Buffett

I think this Warren Buffett quote has the merit of being clear.

As long as you exchange your time for money to consume more and more, you will be stuck. You will be engaged in a race from which you will never emerge victorious. You will spend your life working and never be able to enjoy it.

If you really want to get out of this circle, you’ll have to work smarter, but you’ll also have to manage your personal finances better.

That means focusing on assets. As a reminder, an asset is something you buy and make money with over time. To help you better understand, a car is a liability. You spend money the first time, and then the car will only cost you money.

Conversely, a property is an asset because it usually increases in value over time. Gold is also an asset, as is owning stocks on the stock market.

Robert Kiyosaki therefore recommends that you invest in these types of things that are assets.

So far, I think you can only agree with him.