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  • Featured Articles, Insights, Money, Wealth

Many Things You Think are Assets are Not!

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I must start by apologizing for being out of writing circulation for so long. The demand on my time has been extreme. This year alone, I have traveled over 19,000Miles, organized a programs featuring 15,000 people, run hands on financial intelligence workshops for over 150 people, authored a book and sold over 1,600 copies in 3 weeks and also developed a workbook,  have another 3 set for the press and a few more in the pipeline. It’s really been a hectic first 2 months. I hope to be more consistent with keeping you abreast of things.

What you are about to read, is the product of my thoughts in the last few weeks. If you are not financially free, please pay attention. If you are not earning any passive income today, double your attention, and if you enjoy less than 3 streams of income, don’t pass this over. You can read this, and enroll for a financial intelligence workshop. I am willing to do extremely subsidized sessions until march ends. If you are interested, do get in touch.

I once coached a small class on financial intelligence. My objective was to help them be more conscious of their money and put it to good use, for now and for the future. In starting that exercise I asked them to sum up their current net worth. I asked them to add up their assets and remove their liabilities. While I heard many ridiculous numbers ranging from -$6,000 to 0, there was a particular person that really amused me. His net worth was about $40,000, but what was really amusing there was that he had added the value of his car, his television, his home theater and other household appliances. After all, he had got them with the asset loan offered by his company or bank. You would wonder if the bank is out to deceive people about the real classification of those items, but one can’t really blame the bank, those items would actually be on the bank’s balance sheet as assets. More on that shortly.

Knowing that cars and household appliances are not your assets are not the real paradigm shaking realities, even though quite a number of people are caught within this poor thinking. The real paradigm shifter is realizing that your home is not an asset. The real shocker is realizing that the land you bought 5yrs ago for capital appreciation value is really not an asset. It’s realizing that those stocks you were trading, and the business  you started that is yet to breakeven are not assets. Before any of these will make much sense to you, you need to first understand paradigm one. This is because, the definition of asset required to achieve financial security, differs from the definition of asset required for financial freedom, and once your concept of what an asset is changes, many things you thought were assets would cease to be.

The definition of asset we grew up with is that an asset is any economic resource that has value that can be turned to cash, including cash itself. Value however differs depending on if you are security thinker or a freedom thinker. Robert Kiyosaki’s asset definition comes from the thinking of someone whose goal is freedom. To this person, an asset is an economic resource that has a positive cashflow. An economic resource will only be judged an asset if it brings money into your pocket, if it doesn’t, but have value for future appreciation it has no place on your balance sheet, certainly not as an asset! If you need to spend money to maintain it, paint it, do documentation on it, pay mortgage on it e.t.c. it’s safer to call it a liability.

Many of the things we think are assets are not. It’s best to judge every resource you control by this definition of asset. Value to you, is what can allow you earn income that can set you free. Once your goal changes, value is redefined.

Once this realization is clear, the things we populate our asset columns with drastically leans out for many people. If it’s not generating positive cashflow without your involvement, it’s not an asset! If you need to sell it to get value, it’s a business and should be classified in your income column. If it’s land, and it’s not being leased out to farmers, leave it out of being an asset until you have developed it or converted it to cash.

Also please note that because the bank calls the loan they are about to give you an asset finance loan, does not make it your asset. Your liability is usually on the banks balance sheet as an asset. It brings money to them, it takes money away from you!

Defining things correctly is critical, it’s the only way we’ll progress confidently in the right direction. If you don’t have a copy of my workbook for creating your wealth map, I recommend you get one. It’s not enough to define and classify things into assets or liabilities, we need to use that information to populate the current snapshot of your financial statement. If you currently don’t have any assets, you are currently better off than someone who doesn’t even know yet that he or she doesn’t have. Welcome to an exciting journey to freedom!

Adeolu Akinyemi

Adeolu Akinyemi

10 thoughts on “Many Things You Think are Assets are Not!”

  1. Tolulope Ahmed
    March 1, 2012 at 5:29 am

    Hmm…
    “…the real shocker is realizing that the land you bought 5yrs ago for capital appreciation value is really not an asset…that those stocks you were trading, and the business you started that is yet to breakeven are not assets.”

    It’s very true that the meaning of “Value” Changes and becomes clear the moment a person’s goal is “financial freedom”. Very true for me!

    Wow! This is very wonderful sir! And Thank God for Avenues to Wealth National Power Conference. You are indeed a blessing and an inspiration to this generation and many more to come! In fact you’re are “an asset”!

    Reply
  2. Mo
    March 1, 2012 at 8:05 am

    The clarity with which you describe an asset is so apt. We all strive to be able to grasp this knowledge and I appreciate the effort you have put to make this clear. Land aint an asset until it has is own stream of income, same for a business, same for anything that funds have been expended on. How can I get my hands on your book o?

    Reply
    1. Kunle
      March 2, 2012 at 12:14 pm

      @Mo..Good morning,You can call 08188163913 to get the New CM’s Book and work-book.(Creating your Wealth Map Today

      Reply
  3. Omooba
    March 1, 2012 at 8:19 am

    This is an interesting update to my knowledge. Thanks CM!

    Reply
  4. Mundi Joseph
    March 1, 2012 at 11:29 am

    So greatful to you, MD. Now i know what an asset is. B4 today i thought i know much on assets.

    Reply
  5. bussee
    March 1, 2012 at 2:00 pm

    Does this mean the same thing spiritually as well..LOL….Thanx CM

    Reply
  6. Matthew Abolurin
    March 1, 2012 at 2:45 pm

    CM, thank you for this wonderful and mind blowing truth. I hope people will adjust and do the right things to build assets generating passive income.

    Reply
  7. Kunle
    March 2, 2012 at 12:13 pm

    More eye opener…reduced Liability n Multiple streams of passive income is the way forward!!!
    @Mo..can call 08188163913 to get the New CM’s Book and work-book.(Creating your Wealth Map Today)

    Reply
  8. olufunke
    March 8, 2012 at 3:24 pm

    Nice one!
    More financial education for me here.
    also the realisation that landed property is not really as asset until one generates income from it sinks in.

    More power! More grace!

    Reply
  9. Tunde Anibaba
    September 22, 2012 at 11:15 am

    A nice piece… Keep up the good work.

    Reply

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Many hold their audience spell bound with motivational speeches but few care to hold the audience by the hand and help them walk their way to financial freedom like he does. Many have failed at everything they have tried to do but everything he does turns to gold. Read more…

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