• Plan4Life

What do you condiser an asset or a liability?

The American Dream. Get a good job, earn a respectable wage, get married, own a home in the suburbs with your 2 to 3 beautiful children, go on vacations once a year or maybe every two, and repeat for 25-40 years until you go to retire.

You worked hard for your home, cars, you even had extra to get that pool you wanted, or to build your escape room, you even patted yourself on the back and contributed to your 401k and got a whopping $300,000 saved up. Life is looking good and you can't wait to see what's in store.

You finally go to retire and you realize 3 things:

  1. The $1300 from Social Security isn't enough (hopefully the mortgage and cars are paid off) Lord forbid you have a 1600$ mortgage with a 350$ car payment

  2. That $300,000 broken down is only about 10 years of comfortable income (You're expecting to at least see your great great grandkids right?)

  3. Why didn't you take the time to properly plan your retirement?

You are not alone. This is the reality of Tens of thousands of retiring individuals who were blinded from the truth to no fault of their own. Good News, It's not too late.

Financial Literacy is the single most important tool you can have in your belt. Learning the difference between an asset and a liability, how to make your money work for you, and how to thrive and not just survive.

Assets: Most individuals, when asked what they have as assets, would say "My House, My Cars, I have some collectables, or antiques that may be worth some money"

Now let's look at the definition of what an asset is: Asset: Property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies.

One may look at this definition and think "the house, the car, the collectables, things that have value that can be sold for money" You are not necessarily wrong however, have you ever thought about how much money you've spent on your home? Ex: you buy a $300,000 home, your interest rate is awesome 3%. You went FHA you put $10k down.

You pay your whole 30 years on time, never missed a beat.....

Well, your 300k home just cost you $552,131.35 over 30 years. 30 years later, the market went up and you sell at $350,000!!!! 552.131.35 - 350,000= -202,131.35 that you lost over 30 years. That's $6737.72 per year that you lost by owning your home. Still an asset? Same math works for your cars, credit cards, etc.

Now we are not advising that you do not own a house. Having a home to grow up in and have the kids and grandkids to enjoy is priceless, but you may want to start viewing your purchases as liabilities instead of instruments to prepare you for your retirement.

Stocks, Companies, Bonds, REITS, Rental Properties- Great assets that continue to grow and produce you income and make you more money over time instead of costing you hundreds of thousands.

Be Different, Be Prepared, and start a Plan4Life

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