Thursday, September 2, 2010

What is Asset Spending?

"It's not your salary that makes you rich but your spending habits." -Charles Jaffe

There are many quotes that you will find that will echo the same point. What you spend your money on is a good indicator of what you value and it directly affects your financial condition.

Regardless of your job, income, or position, have you ever said "my paycheck is gone before I get it?" That is a sign that you are spending too much of your income on liabilities instead of assets.

Robert Kiyosaki has the best definition of assets and liabilities that even an economics professor can understand. Assets put money in your pockets and liabilities take money out.

In today's economic times it is important to pay attention to where your money is going and to whom it is benefiting. I often come across people who may be struggling financially but they have the newest smart phone, premium cable/satellite TV, and the latest hot fashions on. If you can't be financially fit, you might as well pretend, right?

Everyone understands residual income. You continue to generate income for doing something once. If you've been to a network marketing presentation then you've been exposed to the concept. It can work the other way too. Think about this. How many times did the cell phone guy sell you the new smart phone? How many times do you pay? How many times did the cable/satellite guy sell you their services? How many times do you pay? Every month you contribute to your poverty while making someone else rich.

I don't subscribe to "cutting back" to build wealth. You should enjoy life and everything that it offers. What I am suggesting is to shift your spending habits. Instead of spending your earned income on liabilities, spend it on obtaining assets that then can be used to buy and/or expense the things you enjoy.

When making spending decisions ask yourself, "is this product or service making me richer or poorer?" Become customers of businesses that are dedicated to making you richer!

Thanks for reading. Please comment and share.

"Building Wealth One Friend at a Time"

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