Assets vs Liabilities

I know… I know… It’s been a while.

Two years to be more specific. Lol.

A lot has happened since I published my intro to Bitcoin educational post. And when I say a lot… I mean a lot.

Bitcoin went up to 19K, down to 3K and is now sitting at 10K while I ghosted. Welcome to crypto.

Today’s post isn’t going to be about Bitcoin nor crypto nor Blockchain though. I’m going to be talking about assets vs liabilities. What they are and why they are important for you to understand.

I’m jumping right into it.


I’m going to take the definition straight out of the dictionary.

An asset is “a useful or valuable thing or person.

Now… If you used to read my blog a couple years ago before I ghosted on all of you, you probably know how much I love assets and why I think they’re extremely important. Regardless, let me refresh your mind since you probably don’t even remember at this point.

Assets, to me, are instruments that generate me a passive income. In other words, they make me money while I sit on my ass and do nothing.

Assets come in many shapes and forms… Here are some examples.

  • Stocks (the right stocks)
  • Bonds
  • Treasury Notes
  • Business
  • Real Estate

All of these have something in common. They can all make you money if you manage them properly.

Again, you and I love assets because they make us money without having to work for it. We sit on our butts all day long and we get paid for it. My goal (and I think this should be everyone’s goal too) is to build throughout the next 40 years of my life enough assets to be able to live off them by the time I retire. If you’re planning on retiring and living off social security or your 401K, you’re dumb. I wont get into this though, I could talk about this forever.

My favorite kind of assets, right now, being 22 years old and not being financially independent, are stocks and business. You’re probably thinking that stocks may not necessarily work towards your advantage and a business usually requires a lot of work on your behalf. These are both massive misconceptions. However, I wont talk about this in this post either. I’m not sure I’ll even talk about that at all. After all, a wizard never reveals his secrets.


Once again, here’s the dictionary meaning.

A liability is “the state of being legally responsible for something.”

Being legally (and in this case financially too) responsible for something essentially means that you have obligations (typically bad debt) forcing you to take money out of your pocket. Remember, we like money here and we focus on creating wealth. If you’re in a spot right now where you’re frustrated because you have a ton of expenses and liabilities that don’t allow you to put cash into your asset portfolio then you should be extremely concerned. You need to get out of that rat race immediately.

Here are some of the most common types of liabilities.

  • Credit card debt
  • Mortgage/Rent
  • Bills
  • Taxes
  • Car loans
  • Children (yes, they are beautiful and life changing but they are also the biggest liability a human being could possibly have)
  • Student loans
  • The list goes on forever…

I laugh (internally) when people look down at me for owning a house (sometimes even for living by themselves) while I still live with my parents at age 22. They think they have an asset that I don’t have access to while the truth is much different. They have the biggest liability that I don’t wish upon any human being. And it’s funny because most people make fall into the same trap! Here’s how most people’s financial roadmap looks like when they move out and get a house/rent a place for themselves.

They go from having minimal expenses to having a ton of huge expenses that don’t allow them to invest in building their asset portfolio. I personally wont be a part of this rat race. Trying to pay for liabilities and having little to no cash to put into building assets? No thanks, I’ll stick with the following roadmap for now.

Remember, the goal is to have as many assets as possible that produce us the highest passive recurring income. The sooner, the better. But don’t take me wrong – I’m not saying you need to be living off your assets by age 30. This is very hard and unless your parents started building your portfolio for you when you were young I doubt you’ll accomplish this. The more realistic goal is to make sure you have a nice portfolio of assets by the time you retire. You don’t want to be dependent on the government to ensure that you’ll have a pension by the time you’re 65. Something tells me you and I wont be as lucky as our previous generations were. And hey – retirement is a very subjective thing. I know of people who have afforded to retire at age 45 and our now living off their assets.

Also… Quick note… I’m not saying you need to have a maximum of $500 in expenses per month in order to be able to build your asset portfolio. It all comes down to how much money you’re making and where your cash is going. If you have $3000 worth of expenses every month but you’re making 7 grand you can most certainly put some of that cash to work for you! Again, it all comes down to your cash flow and whether you’re being financially smart or not.

You’re reading this post so that already sets you off to a good start.

Before you leave, give me your email really quick. I share a few secrets over email that I don’t share anywhere else online. You’ll thank me later, I promise.

Author: Tony Lewis

Marketing nerd, blockchain enthusiast and part-time planet Earth explorer. I like building (and acquiring) long-lasting assets.