Topic: Assets and liabilities in investing | K&L Rock 1
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Topic: Assets and liabilities in investing

Published by: 27.02.2023 10:53:43

What is the difference between assets and liabilities in investing?


Assets and liabilities are two basic concepts in accounting and financial management and have different meanings with respect to context. In investing, we can use these terms as follows:


  1. Assets - These can be stocks, bonds, commodities, real estate, etc. Investment assets are usually acquired for profit, either short or long term.

  2. Assets- They can be loans, debts, interest, fees, etc. Investment liabilities may include, for example, outstanding loans or borrowings for investments.

The difference between assets and liabilities in investing is that assets are a source of profit for the investor, while liabilities are a cost that can affect the return on investment. 


Investors usually try to maximize their assets and minimize their liabilities to increase their total return and minimize their risks. Therefore, good financial planning and management that considers not only investment assets but also investment liabilities is important.


How to acquire assets and use them to get rich

Acquiring assets and using them to get rich is complex and depends on many factors, including investment strategy, risk tolerance and financial planning. Some basic ways to acquire assets and use them to get rich are as follows:


  1. Investing: Investing in stocks, bonds, real estate, funds or other investment vehicles can be a way to acquire assets and increase your capital. However, investing carries the risk of loss, so it is important to set an investment strategy and manage your risks.

  2.  Entrepreneurship: Entrepreneurship can be another way to acquire assets and increase your capital. Provided the business is profitable, investing in your own business can yield good returns.

  3. Real Estate Investment: Investing in real estate can be a way to acquire assets and increase your capital. Real estate investing involves buying and selling properties, renting, etc. This type of investing requires a large financial investment but can yield significant profits.


But getting rich is not just about acquiring wealth. A sound investment strategy, risk management and good financial planning are also important.


How else to raise money to buy assets?


  1. Bank Loans: You can apply to a bank for a loan or credit to finance your investment plan. In most cases, the bank will require collateral, such as real estate or securities.
  2. Investors: You can get an investor who would be willing to invest in your project. However, this requires presenting your plan and business model to investors and building trust.
  3. Crowdfunding: Investors can approach investors who would like to raise funding. This requires them to be interested in your project and present it on the platform. 


It is important to remember that external financing carries risk and requires repayment of loans and borrowings associated with interest rates and the like. It is important to have a clear financial plan and be aware of all the costs and risks involved. 


What does Kyosaki say about financial assets?

Robert Kiyosaki, author of "Rich Dad, Poor Dad," uses the terminology "financial assets" to refer to assets that provide him with regular passive income. Kiyosaki explains that financial assets are assets that have the ability to generate income, such as stocks, bonds, funds, real estate, and the like.

According to Kiyosaki, financial assets are the key to achieving financial freedom because they generate passive income that is not subject to the direct influence of your job or employment. If you have sufficient financial assets, you can avoid dependence on your regular job and achieve financial freedom.

Kiyosaki highlights the benefits of owning financial assets, such as increased income, portfolio diversification, capital growth, and passive income. He also highlights the risks and drawbacks that can be associated with investing in financial assets, such as high portfolio management costs, the risk of market volatility, and limited liquidity.

The goal of Kiyosaki's philosophy is to make us aware of the importance of passive income and to try to acquire as many financial assets as possible to ensure financial freedom and live the life we want.

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