1. Your House: Asset or Liability ?
from <<Rich Dad, Poor Dad>>
Presented By Wenbin
July, 2009
2. Agenda
Asset and Liability: Concept in Accounting
Asset and Liability: New perspective from Rich Dad, Poor Dad
Balance Sheet vs. Income Statement
What’s the criteria to determine
Suggestions from the Book
Discussion
3. Asset and Liability--Accounting
•Asset
●
Something possessed by a business entity from which future economic
benefits may be obtained.
Any item of economic Value owned by an individual or corporation
●
•Liability
●
A liability is defined as an Obligation of an entity arising from
past transactions or events, the settlement of which may result in the
transfer or use of assets, provision of services or other yielding of
economic benefits in the future.
4. Asset and Liability--Rich Dad , Poor Dad
•Asset
●
Definition: Puts Money in Your Pocket
●
Feature : Positive Cash Flow and Generate Income
●
Examples: Stocks, bonds, notes, real estate, business, IP etc.
•Liability
●
Definition: Takes Money away from You
●
Feature : Negative Cash Flow and Generate Expense
●
Examples: Mortgage, car loan, credit cards, school loans etc.
5. Balance sheet vs. Income Statement
Balance Sheet
Assets Liabilities
Income Expense
Income Statement
6. What’s the criteria to determine
•Your house is NOT paid off :
●
More money out than renting income---Liability
●
Less money out than renting income--- Asset
•Your house is paid off:
●
You are having the house as residence--Liability
●
You paid less money out than your renting income--Asset
Income vs. Expense !!
7. Suggestions from the Book
•Asset always comes first .
●
It is never too late to start building your financial empire
• Let Money Work for You.
●
Every RMB is an employee. They works to bring more RMB while you’re asleep
• Invest in Yourself !
●
Work to learn: manage people/biz system/cash flow etc
• Always Prepare to Run Your Own Business
