the Rich Dad Company. By Robert Kiyosaki

Hello again!

Congratulations as you continue your journey to increase your financial IQ. I’m Robert Kiyosaki, author of the all time, best selling, personal finance book of all time, Rich Dad Poor Dad. In my first letter to you, I explained the CASHFLOW Quadrant. In this second letter I will share another “Rich Dad Difference”, how we view Assets and Liabilities.

In 1997, when I released Rich Dad Poor Dad, I caused a bit of a commotion when I stated that your house is NOT an asset. If you want to be rich, you have to know the difference between assets and liabilities.

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Many people are struggling financially today because they think some of their liabilities are assets. Your house is not an asset. Your car is not an asset. What makes something as asset is that it puts money into your pocket.

A liability takes money out of your pocket. Your house is probably NOT an asset because it takes money out of your pocket. Even if your mortgage is paid off, there is insurance and taxes and other expenses TAKING MONEY OUT OF YOUR POCKET.
If you rent your house to others, or a room in your house, and it brings in more money than it costs you in expenses, THEN it’s an asset. This is cash flow into your pocket. A house can be an asset or a liability depending on cash flow. If it flows in your pockets it’s an asset, if it flows money out of your pocket it’s a liability. Once you understand the true difference between an asset and a liability, you can begin your journey to financial freedom.

Welcome to my world.


Robert Kiyosaki

PS – Please click on the following link to watch more videos on the Rich Dad teachings

About klungiwe

Katherine Lungiwe is a Sales executive. One of my best quote is “If it’s going to be, it’s up to you”.

Posted on August 24, 2010, in Uncategorized. Bookmark the permalink. 1 Comment.

  1. A house is only an assets if it is bringing in money, eg, through rental or selling for a gain.

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