This month, I focused on creating a new income stream that I did not realize was possible before.
Income streams are huge if you want to achieve financial freedom. Or what we like to call, the Position of FU.
If you have not read Rich Dad Poor Dad by Robert Kiyosaki yet, I suggest you close this article and pick up a copy. The audio version is great too. I just always like having the hardcopy to be able to write notes.
Anyways, I remember reading Rich Dad Poor Dad and having the ah-ha moment. This was one of the most influential books I have ever read.
One thing Kiyosaki mentions over and over again in the book, is that rich people acquire assets, poor and middle-class people acquire liabilities that they think are assets.
And this is so true here in Canada. Most Canadians have a hard time deciphering between an asset and a liability.
This week, I met with a mortgage broker. With this pandemic, like most Canadians, we are getting a little stir crazy in our house all the time and are considering upsizing a little bit.
Now upsizing makes me panic. Vince & I buy and build houses all the time for investment purposes and don’t bat an eye. But the thought of taking on a bigger mortgage on my personal residents is frightening to me!
Anyways, when I saw what I could qualify for, I relayed this concern of a big mortgage to the mortgage broker. His comment back: “But Mike, remember, this is an asset to you.”
I laughed. How is your own house an asset?
Does it provide me with monthly cashflow? Nope.
Does it take money out of my pocket every month? Yes, mortgage interest, insurance, property taxes, maintenance, etc.
Can I cash it in when I need to? Nope, not unless I have somewhere else to live.
This sounds like a liability to me.
Your own house is a liability!
So what is an asset?
We personally define an asset as follows:
- It provides a monthly income
- It is more likely to appreciate in value over time
- It does not carry expenses greater than the income it brings in
That’s it. That is the criteria for something to be considered an asset to you.
Is your car an asset to you? Answer those 3 questions.
Are your golf clubs an asset to you? Answer those 3 questions.
I can go on and on.
But a big one here. Is you J-O-B an asset?
1. Yes, it provides income. 2. Maybe it appreciates in value over time (that’s a big maybe now a days). 3. But it carries the biggest expense of all…your time!
Your J-O-B is not an asset.
You have to trade away your precious time to take home an income. The average Canadian has to trade over 90,000 hours of their life to their employer, in exchange for an income. During their working years, more than half of their life is spent working and sleeping.
But if we all just listen to Robert Kiyosaki, and trade our time for assets instead of salaries, we don’t have to be like the average Canadian.
And we believe that assets are going to become more and more difficult to acquire as time goes on.
As we talk about in more detail in May’s upcoming newsletter, our government is putting us in a position of no return.
Debts will continue to rise. Assets will continue to inflate. And the average Canadian that’s constantly acquiring liabilities will get left in the dust. That is why we always say that “savers are losers.”
Not sure what assets to acquire?
Check out our website free reports, courses, or sign up for our Canadian Cashflownaire Membership to get access to all of the systems we use to acquire assets. Every month we send updates through our Member’s only newsletter on what’s working and trends we are seeing.
Vince & Mike
P.S. We are serious, read Rich Dad Poor Dad. Everyone we meet that has been successful, both in investing and in business, have seemed to have read that book. It’s so simple and so life changing.