The FAFSA questionnaire asks parents to list their financial assets and those designated as beneficiaries. Aging parents face unique challenges in managing their wealth in their golden years. To help them manage their wealth, it is important to assess their specific needs across all facets of their lives, such as family support, home safety, income sources, supplemental health insurance, and having a will or living trust.
Parent assets are assessed on a bracketed scale, with a top rate of 5.64 after subtracting an asset. Skipping this question won’t affect eligibility for federal student aid.
Completing the FASFA can bring many questions, but understanding parent and student assets is crucial. Independent students don’t have to report parent income and assets, while dependent students do. Completing the FASFA can bring many questions, but understanding the size of your estate, what assets pass outside the will or probate, who should be executor, and whether the intended heirs are minors or not can help off-set any financial issues.
Parental involvement is essential when meeting the first three core emotional needs, especially when the connection is strong. Parents often have no idea which assets hurt their financial aid chances and which do not, which is especially relevant because parents are now…
📹 Interview questions: are you an asset or liability to the organization
Karthik Poovanam is a peak performance coach and author. He has authored over 80 E-books which brings about creating well …
How to calculate parents’ assets?
To calculate Parent Contribution from Assets (PCA), add up total parent assets, including cash, savings, investments, real estate, and business value. Subtract an Asset Protection Allowance, which protects saved assets for emergencies. Multiply the current total by 12 to protect most remaining assets for other needs. The Parent Contribution from Assets (PCA) is obtained. Add Parent Available Income (AI) to the PCA to determine the Parent Adjusted Available Income (PAAI). Insert PAAI into a complicated table, which changes as PAAI increases. For example, if PAAI is $100, 000, the calculated number is $38, 440.
What are the assets of my family?
Family assets, such as a matrimonial home, furniture, and car, are acquired by one or both parties to a marriage for the family’s benefit. There is no special body of law for family assets, but courts have wide discretion to make orders upon dissolution and have developed flexible guidelines. One spouse may acquire a share in the other’s home due to their contributions to the family’s welfare and finances.
What assets do most rich people own?
Ultra-wealthy individuals (UHNWIs) invest in physical assets like real estate, land, gold, and artwork to balance stock volatility. However, they often discourage smaller investors due to lack of liquidity and higher investment prices. Illiquid assets, such as uncorrelated with the market, are beneficial for investment portfolios as they are less susceptible to market swings and pay off over time. UHNWIs allocate 100% of their investments to public markets, as real wealth is generated in private markets. They may gain initial wealth from private businesses, often through business ownership or angel investment in private equity.
How much assets should I have at 25?
By age 25, it is recommended to have an emergency fund of 3-6 months of living expenses and regularly contribute to retirement savings to take advantage of compound interest over time. This will provide financial stability and help weather unexpected expenses. Budgeting and limiting discretionary spending can free up more money for savings goals. Tax-advantaged accounts like 401(k)s and IRAs can help grow savings faster, as contributions can be deducted or taxes paid later in retirement.
Employer 401(k) matching is also beneficial for retirement. Working with a financial advisor can help develop good money habits early on. The first few years in the workforce can be challenging, as young adults may struggle with the cost of living and paying back student loans.
What is a good Sai score?
Pell Grant eligibility is determined by factors such as family size, adjusted gross income, poverty guidelines, and tax filing status. Students who qualify for a maximum Pell Grant have a Student Aid Index (SAI) between –1500 and 0. If their SAI is less than the maximum Pell Grant award, they may still be eligible. Students with a higher SAI may still be eligible for a Pell Grant. If a student’s parents or spouse were not required to file a tax return for 2022, they will automatically receive a Student Aid Index equal to –1500.
Assets on the 2024-25 FAFSA will include previously considered income and non-requested information, such as a family’s small business, in asset reporting. The eligibility criteria for Pell Grants vary by filing status and family size.
How much in assets is considered rich?
The 2024 Modern Wealth Survey by Schwab indicates that Americans require an average net worth of $2. 5 million to be considered wealthy, up from $2. 2 million in 2022 and 2023. To understand your net worth percentile, check out The Kickass Entrepreneur’s U. S. net worth percentiles and Kiplinger’s Personal Finance. A high percentile means you’re richer than the average of Americans. To be a smarter investor, subscribe to Kiplinger’s Personal Finance.
What is the greatest asset for a family?
Parents should remember that their greatest asset is their children, not their wealth or influence. Children today are being fed information like instant noodles, leading to a loss of critical thinking and ability to face daily challenges. Despite a 30-year history of children avoiding suicide after exam failure, more children are becoming emotionally weak to meet life’s challenges. Parents should focus on nurturing their children’s mental and emotional well-being to ensure their children’s success.
Do I want a low or high Sai?
A Student Aid Index (SAI) is a crucial factor in determining the amount of federal aid available to a student. A low SAI can result in a higher chance of receiving federal loans and grants, including the maximum Pell Grant. A good SAI number is one that results in numerous scholarships and grants, allowing students to attend college at a lower cost. A lower SAI indicates more need-based aid. To understand your SAI, use College Investor’s 2024-2025 Student Aid Index Chart, which can be accessed by looking up your family income and size, depending on your college plan. The website’s publisher personally interprets each student’s SAI score, providing valuable insights into their financial situation.
What is the average assets per household?
The mean net worth of the American family is in excess of $1. 063 million, as indicated by the Federal Reserve’s 2022 Survey of Consumer Finances. The median net worth is $192, 900, with notable variations across age, race, location, and education level. From 2019 to 2022, the mean net worth of the typical American family increased by 23%. The survey is conducted triennially.
How much of your assets should be in your home?
Real estate allocation strategies and risk management techniques can be categorized into three main approaches. The rule of thumb is to invest 25-40% of your net worth in real estate, including your home, to provide the benefits of real estate ownership while giving you flexibility to pursue other investment opportunities. However, this rule is not a one-size-fits-all solution and may not suit your specific situation, goals, and preferences.
An age-based approach adjusts real estate allocation based on your age, reducing exposure to risky assets like stocks and increasing exposure to safer assets like bonds. This approach can help preserve wealth, avoid market fluctuations, and prepare for retirement. However, it may not account for other factors that may affect your optimal asset mix.
The goal-based approach is a more personalized approach that bases real estate allocation on your specific financial goals. For example, if your goal is to buy a home, allocate more of your net worth to cash or short-term investments to save for a down payment. If your goal is to generate passive income from rental properties, allocate more to real estate that provides steady cash flow and appreciation potential.
This approach may require more research, planning, and monitoring than other approaches, so use it with caution and discipline. If you are still unsure about how much of your net worth should be in real estate or how to optimize your real estate allocation, seek professional guidance from a financial advisor or real estate expert.
Is a low sai good or bad?
Students with a negative or 0 Supplemental Educational Opportunity (SAI) score are eligible for the maximum Federal Pell Grant, as they have a higher need than those with 0 SAI. This information is used to prioritize limited funding grants, such as the Federal Supplemental Educational Opportunity Grant. However, schools cannot award more financial aid than the total cost of attendance, so a negative SAI does not increase the amount of aid received. To determine your eligibility, use the Federal Student Aid Estimator, which takes about 10 minutes and can be done before filling out the FAFSA.
📹 HOW TO CONVERT A LIABILITY INTO AN ASSET – ROBERT KIYOSAKI, Rich Dad Poor Dad
Assets and liabilities serve as the central focus of this episode of Millennial Money featuring Robert Kiyosaki. Robert dismantles a …
I’m eager to transform my financial liabilities into assets, securing a prosperous retirement. As a soon-to-be retiree, I’m focused on optimizing my 401k after a tumultuous 2022. Inspired by investors achieving impressive returns, I seek strategies to convert my expenses into investments, generating passive income and increasing my ROI. Any guidance on turning financial obligations into wealth-building opportunities would be invaluable in achieving my goal.
I am trying to avoid making any new buys at this point in other not to get sucked into a bear market trap.It’s tough making money in stocks when institutional investors are the driving force behind the selling.. although I read an article of people that grossed profits up to $150k during this crash, what are the best stocks to buy now or put on a watchlist?
I changed my life when my cousin told me about Robert. (April 21, 2017). Worked at a manufacturing warehouse for 6 years, climbed the corporate ladder, making 70K a year, broke a** h**, mentally stressed every day, hated my job and the list goes on. This year I quit my job, got a new high paying job (120k), am currently investing in financial, investing and real estate education. Have full control of my financials and living a better life then ever. No longer live paycheck the paycheck. Although my income is earned income “JOB”, I now have financial control! I have listened to all of your books. Going to listen to them all over again and apply them every day going forward. One step at a time. Robert, you have changed my life! You are my rich dad! Thanks for sharing your stories!
I just sold a property in Portland and I’m thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $450k gains with months, I’m really just confused at this point.
I appreciate your approach to teaching.. To my understanding this just proves how much we need an edge as investors because playing the market like everyone else just isn’t good enough, we just need to hold onto our hopes and wait to see how things turn out because market movements are almost always unpredictable. In my portfolio, I’m noticing more red than green. How are other people in this market raking in over $350k gains within months
Thank you very much! you are the best robert! im 28 years old income 25k gross a year,living in brooklyn,i have 14 years paying rent and working minimum wage,because i did not know what i wanted,i did not had a mentor,i bought your book,the first book i have read,and now i bought your books and james rockards books,also think and grow rich,the warran buffet way book,you opened my eyes robert,now im looking for a better job,breking my mind to do my own business,is just fantastic what you have taught me,i still can’t believe how i feel,thank you!
Everyone has been preaching “buy now, stocks are at a discount” but I’ve been buying stocks at a discount since the beginning of the year and yet the cycle continues with more losses, I know the idea is to hold long term but God I could really give anything to see some growth happen to my portfolio.
Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Financial management is a crucial topic that most tend to shy away from, and ends up haunting them in the near future… I pray that anyone who is reading this will be successful in his or her life!!!
Fortunately, I had a college economics teacher that taught me a lesson at 18. That lesson was: for every huge, frivoluos purchase you make, you need to have an investment double it’s worth, this doesn’t necessarily mean you should always invest when you make a purchase, it simply means living within your means. Varied sources of income is wise and especially like i said, living within your means. Whenever you’re about to make a huge, dumb purchase that doesn’t add value think about taxes and how you get your income. I made $272k combined net last year and paid no Federal taxes.
With inflation running at a four-decade high, a Recession is now the ‘most likely outcome for the economy. How can I grow my portfolio to outpace inflation and maintain a successful long-term strategy? I have been reading of investors making about $250k profit in this current crashing market, and I need ideas on how to achieve similar profits.
I’m glad I pulled through, despite the crises. I am retiring next yr at 55 with 3 houses paid off worth 4.5 million . One is my place of residence the other 2 properties will give me $80,000per/yr rent . I will have an income stream of $20,000 per yr through my super which gives me total $100,000 a yr to live comfortably . I have no debts … Stay Motivated!!!
Is now a good time to invest in stocks? I know everyone says stocks are cheap, but how long will it take for us to recover?. The fact that others in my field make six figures each piece. Obviously, there are strategies to be used in this market, but these strategies are not available to the average person, so am better off putting my money elsewhere. I am fully aware of the expense of working more to get more money.
Market is down still, I’ve been looking up strategies and apparently both bull and bear market condition provides equal avenue to accrue massive gains, and a news article particularly mentioned a 54 year old that made $180k in 5weeks, how do I learn these strategies, my portfolio has been stagnant for months.
Just what I needed to watch. My wife and I are directors of our farm business and own property, plus small pensions. I am nearly 55, my wife is 52. We have started to save to retire from the farm, and possibly live on rental income, I’d really appreciate you go LIVE and talk about how to earn passive income online and retire comfortably, let’s say $1M.
Thank Robert, Im currently reading your book rich dad poor dad, and I really appreciate what I’m learning, I just wished I learned this much earlier on in my teens at least, I’m currently 34, married and currently unemployed because of a layoff … I’m currently perusal all your articles and working on to buy all your books… I don’t want to work for anyone but instead work for my family instead, God willing I can meet you someday… thank you again Master Robert
The effects of the downturn are beginning to sink in. People are being impacted by the long-term decline in property prices and the housing market. I recently sold my house in the Sacramento area, and I want to invest my lump-sum profit in the stock market before prices start to rise again. Is now the right moment to buy, or not?
You’re only as good as the decisions you make today with the money you have. This time last year I considered investing without much knowledge and decided to have a consultation with a fiduciary, and it was incredibly insightful. One year and a couple of months in, and I’m almost debt free. I truly cannot stress enough how helpful experts in this field are!
My favorite part in Rich Dad poor dad was when Rob wanted to buy a Porsche and Kim told him to buy a rental property to pay for the Porsche. The point is that you keep the House AND the Porsche. If you straight up buy the Porsche, you don’t get the house. A friend of mine recently received an inheritance from her mother, a house that is completely paid off in Arizona worth around $300k. She sold the house and bought a car. What did she do wrong? She could have kept both the house AND the car had she just rented out the house. Now she lost the house and only has the car and she’s still broke.
This is a well detailed and informed article. I’m here to learn how to invest after listening to a guy over the air talk about the importance of investing and how he made $410,000 in 5months from $180,000 startup. Somehow this article has helped shed light on some things, but I’m still confused, I’m a newbie and I’m open to ideas
I came here to learn how to trade after listening to a guy on radio talk about the importance of investing and how he made $460,000 in 4 months from $160k. Somehow this article has helped shed light on some things, but I’m confused about the current market volatility, I’m a newbie and I’m open to ideas…
To my understanding this just proves how much we need an edge as investors because playing the market like everyone else just isn’t good enough. I’ve been quite unsure about investing in this current market and at the same time I feel it’s the best time to get started on the market, what are your thoughts?
Success is dependent on the actions or steps you take to achieve it. Show me a man who doesn’t have an investment, and i will tell you how soon he will go broke. Investment is building a safe heaven for the future. With the right choice of Investment that has at least 1% minimum risk and with an expert guidance, profit and Intrest is 100% guaranteed.
I lost over $80k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that’s what everyone said. I’m still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I’m really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Kimberly Ann Doran..
Honestly, I’m unsure if investing is a wise move right now. Take note of how frequently things fail. As I still have some time before I retire, I’m still looking for a better strategy to invest my money despite reading charts and predictions from well-known investors from the past and present. In order to generate passive income, I want to build a solid and reliable portfolio.
Only in America do kids and older adults become liabilities. I grew up in a family of 10. We moved to the states and were below poverty for a while. Some of us run businesses and all of us have moved out of lower class into middle. The idea that children or parents are liability is sickening. We stick together and the thought of putting someone in a nursing home is non-existent in our culture.
The 1% Millionaires stay rich by staying off high interest debts and investing passively. Personally i made my first million from having investments that spreads across stocks, etfs, coins and bonds.What i can say to early investors is diversification and solid management..at this point I’m actually grateful for my advisor Deborah Jean Dykstra.. it’s been great.
Such a Gem of a article. I think one thing Robert didn’t make clear is that liability’s are not bad always SO long as you have the cash flow to have them. If you focus on having more assets then liability’s you are off to a great start. Having a kid, taking care of your loved ones is great so long as you have the cash flow to do so. If the house you want to live in is 3 grand Morgage that’s great, so long as you have the assets to provide the cash flow to do it.
Hello Robert, I have just started following you and hope I could learn most of what you are providing. Don’t know how this knowledge will fit the Indian market and liabilities. But definitely, I would be following you to expand my IT business. So I have learned from this article —dividing whatever I have into 6 parts and they are: income, expenses, assets, liabilities and CASH FLOW. Thanks for this knowledge.
I’m going to break this down real quick and I hope it helps. At 6:23 He clearly gives an example at the age of 25 how he turned a Liabilty into an Asset, so to speak. He used a credit card (LIABILITY) to purchase an apartment (ASSET) and cash flowed at $25 (PASSIVE INCOME). Cash flow=cash earned after paying all expenses. I see multiple benifits out of this scenario. 1) Leveraged his personal credit to obtain debt, a credit card, which means he used other people’s money and didnt have to tie up his own cash. Additionally, credit cards are much easier and quicker to obtain versus acquiring a mortgage. 2) Utilization of someone elses money, Credit Card (LIABILITY), to purchase an INCOME DRIVEN ASSET which covered all operating expenses for the apartment, including repayment of the credit card, once the rent was paid by the renter, and left him with $25 that he did not have to get up and actively work for. 3) His FICO score had to go up for paying back on the card, thus opening the door to more opportunity to acquire larger lines in the future. 5) The Apartment (ASSET) acquisition immediately increased his networth (WEALTH) at the same time. 4) Holding of the ASSET long enough, or buying right coming in the gate will allow cash (EQUITY) to be pulled out of the asset either immediately or when it appreciates. 5) Sell the asset when its crazy over valued like in 2008 and now in 2019 and walk away with a HUGE PROFIT, 1031 exchange it and increase your passive income and wealth without paying tax on the gain all while using a credit card 💳 (LIABILITY/DEBT).
now in the twilight of my years, I experience increasing cash outflow because of only measly social pensions with increasing food, utility and medical expenses. early in life, I set and controlled my monthly expenses, rewarding myself minimally for additional income from working hard in my solo staff biz. And invested the surplus mostly in government bonds. I do not believe in life insurance, I tried in stock markets only to lose as a casual retail investor. I could have been better off by acquiring real estate but financial constraints of low cash position stopped me. I am in many ways like what Mr. K is saying in this article. I THANK MR. K FOR HIS VERY TRUTHFUL AND INFORMATIVE article.
Hi Mr. Kiyosaki! First of all, thank you for teaching us all this priceless lessons and for sharing your lifetime experience. I read almost all of your books and I’m slowly starting to see some results! I just have one question for you if you don’t mind : Instead of buying things that depreciate, I enjoy finding rare antique items at a really good price that goes up in value with time… Do you consider rare antique items an assets?
In his book Rich Dad Poor Dad. He wrote about his rich Dad that ” I m rich because I’ve you, kids… Poor dad said I m poor because I’ve you. kids. So it’s about your mentality how you see your kids assets or liability. Now I like his rich dad personality but here I disagree with Robert on having a family as liability. Money is good thing but it’s not everything. There is a lot of things money can’t buy and you all already knew it.
I wasn’t financially free until my 40’s and I’m still in my 40’s, bought my third house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing in the financial market is a grand choice I made. Great article! Thanks for sharing! Very inspiring! I love this
Apt and insightful article. Let me add that I moved to a relatively low value housing area because of tax from Farragut, TN, to North Dakota. Reduced my spending and adopted a good dieting. Saved 30% of my income and made a down payment for a house, put a few rooms on rent and the rest of the work was done by my FA. I didn’t achieve it faster because it takes time to perfect, I’ve grown a nest egg of over $450k in almost a year, even as the economy worsens; This can only be achieved by setting goals and of course working with the right FA. A lot may disagree on an FA because of their charges but I always say the work of an FA is so underrated and it’s more than just making sure you make profit. As long as you get your profits based on agreements, an experienced FA who’s been in the market for years will not care about Milking you. Considering how the global economic market has slowed, FAs do a hard-high tasked job to protect and offer financial benefits that a regular investor will not know of. For a year and the half now, I’ve invested with a financial company that invests on pharmaceuticals and cannabis stocks to cover up for the slowed growth of their bonds (pharmaceuticals and cannabis), crypto (yes, crypto!) and sp500 investments.
00:02 Understanding how to turn your house into an asset is crucial for financial literacy 01:57 Understanding cash flow is the key to being rich. 03:40 Your house is not an asset; it’s a liability because it takes money from your pocket. 05:36 Buying a taxi car can be an asset due to its cash flow. 07:19 Focus on cash flow when considering assets and liabilities. 09:08 People can be both assets and liabilities. 11:02 Identifying human liabilities and their impact on financial IQ. 12:38 Assessing liabilities is crucial before pursuing passions.
The best thing I learnt during the pandemic was having passive sources of income, and I am grateful as the experience of the pandemic really opened my eyes to possibilities, it’s important to have back up plans, as it is said ” you haven’t started making money till you can make money in your sleep” “let your money work for you” I am glad I did and I am glad I met Mr Kent white as he has been my a wonderful financial advisors and trader .
Robert sir was wrong in 1 thing… kids and relations are not Liabilities – They are Assets… bcoz if u love and take care of them in their need(with true love n affection) they will take care of U when u r in need…..(old age, etc)..😊 I feel this. In India we have that love, family and we live together…(especially very southern part of India) So here family is an asset…. I feel this…
Robert talks about buying property for rentals but that has expenses too,as they get torn up, tenant doesn’t pay & its an expense to remodel,evict, time involved to repair or hire repairs, stress from lazy tenants, etc. …maybe you can show losses but in comparing income to expenses plus headaches,stress, I ask you, is it really worth it? Maybe I’m just not seeing the full picture but I worked for an attorney before retiring & we always dealt with landlords trying to evict for tenant not paying rent…&then even after going through court & winning, you’d have to go back &get a judgment against deadbeat tenants b/c they still wouldn’t pay.
Hello Robert and Rich Dad Foundation, I can’t thank you enough for the great help you have been offering to people like me (in E and S quadrant currently). I had no idea about investing and was a spendaholic until very recently. But after reading rich dad poor dad, it opened my eyes. Now I am 25; have completed my graduation; working in E quadrant and have an education loan. I aspire to become an Investor and finally be financially free by age of 40. Right now, I am investing in stock market and mutual funds. But I am now in dilemma as to whether pay off my debt completely first rather than focusing on building asset column. Because for that, I need to stop the mutual fund and pay that amount as EMI. Could you please suggest me.
His advice sounds great. Just try to apply it today. It’s not the same. You have to have one hell of a credit card today for the average Joe. Not happening. So someone with little money needs to really know how to move about this game board. Most real estate deals you need 20 to 30 % down. Not 10% . So who’s credit card has that amount. Yes some but most no. Most need to have a job, live below your means like Warren Buffett and save for a down and go from there. Maybe use equity if you have a home but then you pay interest on that down payment. The numbers need to be reviewed on everything before a move is made. And the stick market is just fine.
The volatility in the market is alarming. How can i diversify my reserve across multiple markets while creating a comprehensive portfolio allocation that balances my concerns of risk aversion and returns that meet yearly inflation? I mean I’ve heard of people making up to $300k weeks during this crash and I’d like to know how.
8:16, I agree with that. My father has 4 children, I have to sacrifice what I want for my siblings. I just can’t take everything, don’t care to my siblings, try everything I could in life. I hate to be kind, I want to be an evil person. I’m poor, I spend most of my time thinking about how, how,… and I will not get married and have a kid if I’m poor. Even if I have kids, I will make sure to only have one. I will make sure my only children can do everything in life, try all the possibilities for his future.
If you rent it out, after buying a property, where would you live? and if you rented in a different property and for example the property that you rent out, cost the person $1400 a month and the house you cunrenttly rented in cost like $1200 the cash flow is $200 but you also have to pay back the bank the loan from the property that you bought and the price could be like 1000 per month to pay back the mortage or the money you borrow from the bank, so now there is no cash flow. What should I do?
The year is almost over and very glad about the decisions I have made so far. Investing in the market earlier this year regardless of the market conditions has saved my life. I made over 70k USD with a start of 25k in the last 7 months. I know it’s nothing compared to what others make but I’m glad I’m changing my finances
Well perusal this article is one big asset! Unfortunately, the great percentage of people don’t even know the words “assets and liabilities” and if they do, they never thought about the difference between them! We wish, they teach us important stuff like these in school. Things that would change our perspective of money and help you acquire wealth and thus live free!
I do understand this. Rental prices are higher than mortgae payments aren’t going to change anytime soon. You could buy a property with a mortgage payment of $600 or less and rent it out for $1000. I see it every day. The point is to rent out what you own which allows someone else to pay the mortgage payments on your property until its paid off. Then you get another property and repeat the process. Quite simple really. Multifamily units are best.
I also remember Kim started his first business with a friend’s sister managing a library for children. Close relatives are also easy to trust members, naturally acquired networks and also hedge against health risks. Siblings are natural partners if you know how to manage your money. So it depends how you look into things
I don’t really understand…. does he mean income from rental is not taxable in USA? He only say he purchase his 1st property when he is 25 years old, but he did not say what he do to earn the money to buy it. I wonder if his concepts work in Singapore, or only apply in US because the policies are very different. Just wondering….
While I love and appreciate Robert’s financial advice and wisdom, if you see your loved ones as liabilities just because they cost you money means your fundamentally broken as a human being. Not everything in life, especially your loved ones, are meant to be monetized. Yeah it’s important to have as many assets as you can but even the notion of breaking down your core loved ones as either an asset or liability is such insane bad talk.
This is regarding whether people/ more kids are asset or liability. Consider the following case: My parents have 5 sons and due to their reasonable intelligence they invested in each kids education and health, which left them barely with any money. Let’s say out of 5, 3 kids got decent jobs and they get married to 3 working women and all of they stay under the same roof (let’s consider their brotherhood is strong). Now each of the 6 earning members share one car, one house and common expenses. I would consider this as a better asset example rather than having one kid to save my expenses. Any thoughts on this?
La mayoría de las personas descartan muchas de sus mejores y más rentables ideas de inversión simplemente porque probablemente no funcionará. Estos inversores nunca se detienen a considerar cuánto ganan si realmente ocurren resultados poco probables. Honestamente, la única forma de sobrevivir a la recesión es tener más dinero.
I know Robert doesn’t believe FICO is the net end game, but in the beginning starting off it’s crucial to those initial purchases in real estate. Too many try to buy that McMansion now instead of a good starter home they can move to a rental in a few years and then move up to a good living house (not a McMansion) and then add on other good starter homes/apartment homes for others. I wish I knew this 25 years ago. Also another thing not talked about is bad relationships with marriage/whether common-law or official. You can lose half of everything built overnight. I made that mistake twice.
Nice article, but never answered the question as to how to turn a house or car from a liability to an asset. Sure, I can buy a house and turn it into a rental or buy a car and turn it into a taxi, but where then can I live without paying rent? How do I transport myself from one point to another if I live in the suburbs where there is no effective or efficient public transportation? In short, how can I turn my principal residence into an asset or my necessary car into an asset?
I get the idea of a house being a liability, however, it would be less of a liability then renting after you pay it off. I wanted them to discuss ways to make money from having a house that you can’t do with an apartment, turning the house into more of an asset. For example, if you have a house with a yard, you can garden and save a LOT of money on your grocery bill. If you have a house with a garage, you could set up an ongoing “Garage Sale” shop in there and make money that way, etc. etc. etc.
TLDR: The key idea of the article is that understanding and managing cash flow, as well as recognizing the difference between assets and liabilities, is crucial for financial success. 1. 00:00 🏠 A house is not always an asset, but can be converted into one depending on how it is used, according to Robert Kiyosaki in his discussion on financial education and literacy. \t1.1 Robert Kiyosaki discusses the misconception that a house is an asset and explains that it can be converted into an asset depending on how it is utilized. \t1.2 Financial education and literacy start with understanding the six basic words: income, expense, asset, liability, FICO score, and borrowing money. 2. 02:04 💰 The secret to being rich is not a college education, but the ability to control cash flow by managing income, expenses, assets, and liabilities. 3. 03:13 💰 Your personal residence is not an asset because it takes money from your pocket, while an investment property that generates cash flow is considered an asset. 4. 04:56 💰 Focus on cash flow when making financial decisions, as assets put money into your pocket while liabilities take money out of your pocket. \t4.1 Financial intelligence is the ability to control cash flow, and buying a car is a liability unless it generates cash flow, as demonstrated by the example of NFL players who go broke because they can’t control their cash flow. \t4.2 Assets put money into your pocket, liabilities take money out of your pocket, so focus on cash flow when making financial decisions.
Thank you for walking the talk guys,Robert being responsible through self thinking,learnings,plus teachings brings truth to a level of understanding for and all Women and Men of the lands.Been following you’s from the 90th always and ready in giving your most precious ” time.”Bravo to you’s and all who do so.Enjoy !!!
We arenting a house at the moment . Planing to buy house for ourselfs . What would be better in this situation to by a house for business purposes and keep renting where we live now or buy our own house and then think of buying house for bussiness to create passive income ? 2 of us working full time, but we want create passive income and become financial free ? Any advice?
Thank you for all the knowledge and wisdom . So I can get straight to the point I watched a lot of your articles so I can give it to you straight this is my first time I’m just a worker and I’m changing those habit my boss is a doctor with a construction company roofing he has too foreman and six workers so he told me to come up with a business proposition and if you consider that I’ll be able to be partners. I’m going to be a success story I’m going to make billions of dollars so if I fail at least I feel like millions lol
Assets put money into your pocket and Liabilities take money out of your pocket… instead of buying a car for leisure and travel its better to turn it into a taxi business like Uber or Lyft or hire it out. Instead of buying a big house put up rentals/buy rental property and use the income from your rent to pay for your mortgage instead of using your salary. good point
This is too broad but I get the point. You can definitely buy a house, fix it up while you live in it (or just buy in an upcoming area) and it is an asset. When you are paying rent, you are paying someone else’s mortgage so that’s the only part I don’t agree with. Doesn’t mean buy the most expensive home but you can definitely make your home an asset. I bought my house for 205k, have put about 60k into it and now 4 years later it’s worth 400k, that is an asset.
I lost over $60K when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that’s what everyone said. I’m still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I’m really grateful I find one source to recover my money, at least $9k profits weekly. Thanks so much Mrs Gretchen Dougherty
lots of whiners and excuse makers on these comments…im soo excited to buy my first rental property….i dont even care if i break even every month ill still make out with the appreciation if i decide to sell in a few years…. but i wont..i’ll buy another house…..the sooner i pay off 1 house..the faster i make more money the sooner i pay off the second…
Dear Robert, dear ladies and gentlemen… I love ur articles and of course ur idea… I stay in Cambodia and have the plan to do exactly what u are talking about here in this country (real estade). For that, id opened a U.S. LLC to get entrance to the U.S. system. My plan is to find private investors on growd founding plattforms and try to borrow money from U.S. banks. How difficult is it to get money from U.S. Banks and may u guys have an advice, how i do it best… thx for ur answers!
Wow, it is bad when you start seeing your family as a liability. Can you imagine if your parents saw you sir as a liability? You would not be here. Remember life on this planet is temporary. Life after is eternal. You cannot take your money with you no matter how rich you are. Folks, money is not everything in life . No matter how you look at it. He was not handed the money, so he had to work for it.
I don’t necessarily agree with the statement that your personal home is always a liability. I do think that there is a massive misunderstanding with people thinking their homes are always an asset though. One thing a lot of people don’t realize is that over the course of a 30 year mortgage, you’re going to pay nearly the same amount in interest as you did with the principal. Lets us an example… if you purchase a home for $100,000, and put 20% down ($20,000). You’ll have an $80,000 mortgage, which after 30 years will have cost you $160,000 because of interest. The national home appreciation rate is 3-4% year over year (not compounding). So if we’re optimistic at 4%, then after 30 years your home would rise by 120%, or in the case of a $100,000 home that would be $220,000. Adding the cost of the mortgage ($160,000), and the down payment ($20,000), the true cost of the home was $180,000. So you would have a net gain of $40,000 on the sale of the home. However, you also had to pay property taxes, which is generally around 1-2% of the purchase price. So lets assume $1000/yr property tax, and you would have paid $30,000 in property taxes over the span of 30 years. Now you only have a $10,000 net gain. Start adding up all the maintenance and repairs and you’ll quickly find that you have a net loss. Even though most people would think they made $120,000. On the flip side, you’re home could appreciate more than the national average, and the home could actually be a net asset. So to circle back to my point, it isn’t completely accurate to say that a home is always a liability.
Especially you have to balance between the income expenses and savings/investment. The right way is to sit and write your priorities and cost. Capital expenditure a separate list. Now first take out 10% savings from your take home monthly income. Then the priorities and necessities. That way you know what you both planned and work towards it. While a tailor stitches a shirt for you he takes the measurements and ask your desired way of stitching it with buttons and style. So the cost. Then he will surely tell you if the garment you gave will for only for a half sleeve shirt. On the other hand if you plan for a shirt with full sleeves then to get the need of cloth measure and width. Here you have a choice for expenditure based on the choice and varieties and budget. So it is a mechanic and the machine run it needs time to time tuning and so also your planning for savings/investment. A seed saved to day gives a million later, and it applies to everything.
Will all your cash flow stop you from dying? Will your cash flow stop your parents, friends, spouses, etc. from dying? Will your cash flow stop your children from dying? Clearly not, regardless of how large your cash flow is. I suspect you might not see the wood for the tree, the point of life itself? A clue, It’s never been and never going to be about anyone’s cash flow!
He had me till 8:00. What a terrible analogy to see humans as liabilities. Shame on Kiyosaki – kids particularly should be NEVER seen as liabilities. This is a rapid, and disgusting slippery slope to see humans merely as object. Kids are the most beautiful gifts of life. You invest in them, grow them and grow with them – yeah it takes money but that is like a fun investment to see what they go on to become. That investment is a forcing function to make you work harder. I have 4 kids. Precisely due to that reason, i worked hard and went from no home of my own prior to my kids to 3 houses totaling 5 millions dollars today. That will likely grow since 2 of those homes are big “assets” in Kiyosaki’s terminology. The investment you make will all come back to you in some way. The other way you will be ending up living a lonely life, lot of money but nowhere to put in to give you a personal sense of gratification. Take my advise over Kiyosaki – 100% guaranteed.
Could someone clarify what Robert meant at point 6:50 when he said making a house an asset and a source of income means you do not pay tax (asset income = no tax). But of course you pay tax on that (in the UK at least), unless you pay your landlord cash in hand and they do not show this money on their bank statements or to their accountants.
I think the pandemic has taught people a big lesson, having one stream of income is not really a good idea cause your job doesn’t secure your financial needs. The pandemic has really set out business-minded people from the rest that is why I’m so lucky to be among the investors trading with Mrs. Kamilah Thurston as his student it’s been success and happiness since the beginning of my trades
When I married my wife, we bought a house. Now that are children are grown, we sold the house we raised them in and bought a smaller house because we did not need all the space we had. I have no regrets in buying a house to raise our family in when I look at all the money we put in the bank tax free when we downsized. We would not be where we are financially today if we would have rented all them years.
I love the facts about assets and liabilities but the analogy of taking care of parents as a liability disturbed me. We cannot call it liability rather our duty to take care of parents and elders. They provided us for many years. We need to repay them with love in our heart. That is what my culture taught me.
I admire this persin…me to has father…he is very old already….his savings is going to shattered day by day because of his expenses …I afraid that one day it will gone forever….but my conscience is clear….how about if it will ruined forever…I don’t have work because I am the one who takes care of my father…..I pray to God that he give me a wisdom to handle it,. I think this guy is an answer…..Thank you LORD…!!!
I liked the new definition of asset and liability. Furthermore, I agree to this fact that wives are literally expense( I used to consider them as asset). But children, i think it is investment. Why, because I can take care of myself and i will take care of myself. So with kids, I am investing to have a future where I can have someone whom I would be able to speak and share my feelings when I grow old.,,,,( please consider it as my opnion and there is no wrong or right)
I get the idea that cash flow = asset, but a house can still be an asset without cashflow. Example, I bought a house (as my primary residence) for 78K. I then spent 40K to fix it. I sold it for 190K. I then learned that because I lived in for 24 months, and sold within five years of owning, I was capital gains tax exempt. The title company didn’t even report the transaction to the IRS. The gain was wired into my account within a few hours after closing. How is that not an asset?
working hard on it. I think it is plausible, just that hard work is essentially still needed to make it a reality. Just wondering…with zero capital, and then getting a loan from banks to buy real estates to have rentals coming in as cash flow, how are we able to serve the installments if the monthly rentals are lower than the monthly installments commitment?
He’s not telling you about when you rent a house you become a landlord, and being a landlord is no picnic. It takes a lot of your time, 24/7. And there’s house expenses, broken refrigerator, stove, air conditioner, broken toilets, emergency calls to you to come and fix a leak, it can be a nightmare being a landlord.
I disagree with the home not an asset! I understand the loan/mortgage makes it a liability but you have to live somewhere and pay!!! You can rent where your commitment to the lease is completely a liability or you can own.. The home even with a liability attached (loan) is clearly an asset. 1. The pay down on the mortgage (principle) clear creates a delta between the loan and equitable value of the property. This difference is consider principle or an asset.. I can take a loan against it! In addition, the property can and historical statistics prove properties trend upward over the life of the loan.. 2. I can covert this property to an income producing property..an asset!
I finally got it after perusal you for two years it’s just clicked in I kept getting stuck on the cash flow part where the assets also payout taxes and upkeep but I get it now even it only brings in 100when said and done it’s an asset lol finally 🙏💰💰💰 you just need a lot of them 25.00, amount assets haha
I don’t know in USA but here in Europe we’ve got an insurance called LTC, Long Term Care. Basically, if you become too old look after yourself the insurance company pays you a certain income for the rest of your life, whatever your age is. Considering this, how would you label an insurance: a liability or an asset? Thanks for your teachings Simon
Really a practical point of view. Today Insurance is very costly for old people. Moreover the Insurance doesn’t have an Artificial Intelligence to understand the needs of old people ‘s insurance for their medical expenses. They are only greedy for premiums but claim is only mirage as timely support never reach them.
I appreciate how Robert brings up the elderly care and the family responsibility involved. Long term heath care insurance is great until it gets cancelled, like his example person! This is where generational living in the same property may be the only solution, just having to hire home visit healthcare for help. So, if you have a large family and possible more elderly to care for in the future, an asset that might be important is a property which has multiple dwellings or multiple “suites” so that you can have them on site in the later years. These properties could start out as rental units (assets) and then transition once paid off into family support property.
In case of owning a house i have a different opinion if u don’t own a house obiviously u have to pay a rent but if u own a house a house not a fancy type obiviously u can save some money as rent and that rent money u can pay on ur emi for ur house but after some time u own an asset which is having value and that u can sell in the market when u need and obiviously in most of the scenarios real estate price will only go up unless and until any real bad scenario occurs like the famous 2008 crisis or something