ASSET VS LIABILITY
Assets are instruments that provide you with a future economic benefit.
liabilities are things that give you a future obligation.
More simply put, assets put money into your pocket while liabilities take money out of your pocket.
One day, the son of a rich man, who was an undergraduate,
approached his father and the following discussion took place.
Son: Dad, may I speak with you?
Dad: Go ahead.
Son: Among all my classmates, I am the only one without a car. It is
embarrassing.
Dad: What do you want me to do?
Son: I need a car. I don't want to feel odd.
Dad: Do you have a particular car in mind?
Son: Yes dad (smiling)
Dad: How much?
Son: $1600
Dad: I will give you the money on one condition.
Son: What is the condition?
Dad: You will not use the money to buy a car but invest it. If you
make enough profit from the investment, you can go ahead and buy
the car.
Son. Deal.
Then, the father gave him a cheque of $300. The son cashed the
cheque and invested him in obedience to the verbal agreement that he
had with his father.
Some months later, the father asked the son how he was faring. The
son responded that his business was improving. The father left him.
After some months again, the father asked him about his business
again and the son told him that he is making a lot of profit from the
business.
SOURCE
When it was exactly a year after he gave him the money, the father
asked him to show him how far the business has gone. The son
readily agreed and the following discussion took place.
Dad: From this I can see that you have made a lot of money.
Son: Yes dad/
Dad: Do you still remember our agreement?
Son: Yes
Dad: What is it:
Son: We agreed that I should invest the money and buy the car from
the profit.
Dad: Why have you not bought the car?
Son: I don't need the car again. I want to invest more.
Dad: Good. You have learnt the lessons that I wanted to teach you.
You didn't really need the car, you just wanted to feel among. That
would have placed extra financial obligations on you.
It wasn't an asset then but a liability. Two, it is very important for you to invest in
your future before living like a king.
Son: Thanks dad
Then the father gave him the keys of the latest model of that car.
#Morals
Always invest first before you start living the way you want.
What you see as a need now may become a want if you can take a
little time to get over your feelings.Try to be able to distinguish between an asset and a liability so that
what you see as an asset today will not become a liability to you
tomorrow.
The difference between the rich and the poor is that the rich look for assets while the poor look forward liabilities..... .