About five years ago I learned a shocking and challenging key that has made more of a difference to my financial freedom than anything else so far. I’ve addressed it a time or two but it’s time again. Why now? Since Christmas time alone I have known close to a dozen friends and acquaintances who have either lost their jobs or had hours cut back and are now facing the winter needing to bolster their income. I’m not referring to the seasonal lay-offs prevalent in our area either. I’m referring to previously full-time employment positions. Several lost jobs to businesses closing, many more to the need to cut staff to just stay in business. I don’t find fault with companies doing what they need to do. I’m just a little bewildered that, in general, there seems to be a sense that there is nothing that can be done about it.
The key that changed my mind was when I began to understand who money flowed through our hands and mainly, how we received income. Most of the country exchanges their time for money. Stop working, the cash flow stops. If you become sick, disabled, fired, downsized, layed-off or just get lazy and stop, so does the money. The key is in a unique way of looking at liabilities and assets. My new definition of the two are as follows; (PLEASE, pay attention)
“Liabilities take money out of your pocket whether you work or not, Assets put money in your pocket whether you work or not” Most Americans spend their entire life accumulating liabilities rather than assets. Accumulate just enough assets to offset your working wages and you have just made yourself recession proof, down-size proof and un-employment proof.
As a matter of fact, you’ve just created financial freedom for yourself!