Every man needs to understand Assets & Liabilities

[hollowtipsParticipant 681]

The difference between middle class and rich people is that middle class people buy liabilities and rich people acquire assets.

Simply enough put a liability cost money, or looses money, where as an asset makes you money. A car, clothing, vacations, woman, marriage are liabilities. Stocks, houses and businesses are assets.

Basically an asset puts money into your pocket, liabilities take it out.

There are 5 main types of assets
Real Estate
Land
Business
Stocks
Bonds
And employee’s can technically be assets based on their capabilities and value they bring to your life.
Education can technically be a asset but it depends on how you use it and what you get.

When you own an asset it makes money for you while you’re sleeping called “passive income” so in essence it’s making money for you instead of you having to work. With enough assets you can quit your day job and retire but if you never get any until late until life you’ll be a slave until you retire.

As MGTOW are cream of the crop of men, we should all be aware of this knowledge, since wealth is the ultimate current form of power, and the only thing that controls woman.

It’s also the key to acquire assets as soon/young as possible to get the most value out of them and obtain economic freedom.

[Faust For ScienceParticipant 22521]

The system that society works under has become so twisted that there are no true assets. Only liabilities.

Taxes and fees are on almost everything.

The only asset you truly have is your time. Use your time wisely.

I suggest a hobby. Reading a book. Writing a book. Do whatever hobby brings you joy and contentment. Because those are the only things we have left which we can achieve. Everything else has been taken from us. At least until the collapse of society fully hits.

[Buller100Participant 2189]

Also for the younger guys, time is your friend 20$ invested at 20 years of age will grow it has time, the earlier you invest the higher the returns.

Time compounds the investment, 40k$ invested in real estate 20 years ago puts the asset value at 180k$ now with added 110k$ back in rent….

Rental income $6000 a year that’s 15% on your original Investment.

Invest young, sure there are taxes anyone who earns has taxes to pay, the only 2 certainties of life are death and taxes.

[Anonymous 25]

Some years ago, a 25-year-old gold-digger in search of a rich husband stuck her neck out on Craigslist New York asking for tips on landing Mr Moneybags. Ms Pretty, as she called herself, was rewarded by a letter from someone claiming to be the CEO of J P Morgan (never verified) containing a pill so bitter that she took herself and her post off Craigslist.

Ms Pretty’s quest to cash in:

I’m going to be honest of what I’m going to say here. I’m 25 this year. I’m very pretty, have style and good taste. I wish to marry a guy with $500k annual salary or above. You might say that I’m greedy, but an annual salary of $1M is considered only as middle class in New York.

My requirement is not high. Is there anyone in this forum who has an income of $500k annual salary? Are you all married? I wanted to ask: what should I do to marry rich persons like you?
Among those I’ve dated, the richest is $250k annual income, and it seems that this is my upper limit.

If someone is going to move into high cost residential area on the west of New York City Garden(?), $250k annual income is not enough.

I’m here humbly to ask a few questions:
1) Where do most rich bachelors hang out? (Please list down the names and addresses of bars, restaurant, gym)
2) Which age group should I target?
3) Why most wives of the riches are only average-looking? I’ve met a few girls who don’t have looks and are not interesting, but they are able to marry rich guys.
4) How do you decide who can be your wife, and who can only be your girlfriend? (my target now is to get married)
Ms. Pretty

The answering salvo:

Dear Ms. Pretty,
I have read your post with great interest. Guess there are lots of girls out there who have similar questions like yours. Please allow me to analyse your situation as a professional investor.
My annual income is more than $500k, which meets your requirement, so I hope everyone believes that I’m not wasting time here.

From the standpoint of a business person, it is a bad decision to marry you. The answer is very simple, so let me explain.
Put the details aside, what you’re trying to do is an exchange of “beauty” and “money” : Person A provides beauty, and Person B pays for it, fair and square.
However, there’s a deadly problem here, your beauty will fade, but my money will not be gone without any good reason. The fact is, my income might increase from year to year, but you can’t be prettier year after year.

Hence from the viewpoint of economics, I am an appreciation asset, and you are a depreciation asset. It’s not just normal depreciation, but exponential depreciation. If that is your only asset, your value will be much worse 10 years later.

By the terms we use in Wall Street, every trading has a position, dating with you is also a “trading position”.
If the trade value dropped we will sell it and it is not a good idea to keep it for long term – same goes with the marriage that you wanted. It might be cruel to say this, but in order to make a wiser decision any assets with great depreciation value will be sold or “leased”.

Anyone with over $500k annual income is not a fool; we would only date you, but will not marry you. I would advice that you forget looking for any clues to marry a rich guy. And by the way, you could make yourself to become a rich person with $500k annual income.This has better chance than finding a rich fool.

Hope this reply helps.

signed,
J.P. Morgan CEO

[TuneoutParticipant]

Buller100 wrote:

Also for the younger guys, time is your friend 20$ invested at 20 years of age will grow it has time, the earlier you invest the higher the returns.

Time compounds the investment, 40k$ invested in real estate 20 years ago puts the asset value at 180k$ now with added 110k$ back in rent….

Rental income $6000 a year that’s 15% on your original Investment.

Invest young, sure there are taxes anyone who earns has taxes to pay, the only 2 certainties of life are death and taxes.

Good points,however real estate can be a headache. If you plan on living in the property for the full mortgage term then cashing in on the equity assuming housing prices in your location are stable then I would say it’s a good investment.
On the other hand if you are just buying for rental income and a quick flip be aware or property transfer taxes and tenants from hell. Add to that you are the landlord so on call 24/7.
In this economy where nothing is stable I’d rather invest in the markets with a well diversified portfolio,rent a nice place in the country and keep myself mobile,not tied down.

Lifes a bitch,but you don't have to marry one!

[BeerParticipant 11832]

hollowtips wrote:

The difference between middle class and rich people is that middle class people buy liabilities and rich people acquire assets.

Definitely true. I know so many “broke” people who make good money but are always in debt and don’t ever have any meaningful savings. They all however seem to have plenty of money for vacations at least once a year, nice cars, the latest smart phones with expensive data plans, to go out every weekend, etc. Sure those things are nice but a day later you s~~~ out that fancy dinner, a month after you stop paying your cell phone it gets shut off and its useless, and your car is going to lose value the second you drive it off the lot and continue to do so the longer you own it. I’m not rich yet…but I’ve been doing what this guy is doing…

Tuneout wrote:

In this economy where nothing is stable I’d rather invest in the markets with a well diversified portfolio,rent a nice place in the country and keep myself mobile,not tied down.

With the money I’ve saved by not buying or doing the typical s~~~ most people my age are getting into, I’ve already accumulated enough stock to pay me about 300 dollars a month in dividends. Its not an astronomical amount of money…but still…I’m getting +300 a month while a lot of people are paying way more than that out in interest on various debts a month. Compare me to a guy paying 500 a month in interest on some debts and at the end of the year I come out about 10,000 dollars ahead of him just by not buying dumb s~~~ and getting into debt. Plus I can continue to buy more shares as I’m earning more at my job than I need to live off, reinvest my dividends, and hopefully my dividends get raised over time. Fast forward a year, or two, or more and I’ll be making 2, 3, or 4x+ the dividend income while that guy living off credit paying interest every month is probably going to still be doing the same dumb s~~~.

Maybe the gap is 10k a year now between us but eventually its going to be 20k, than 30k, and keep going up to the point where I’m living on the beach retired early and he’s still broke…at which point he’ll be sitting in his fancy house with his fancy car and all his fancy tech gadgets bitching about the 1% and how its not right people accumulate enough money to live off capital gains while completely ignoring all the things I’ve done without that allowed me to accumulate that wealth while he was out spending his money on depreciating things faster than he could earn it.

[BeerParticipant 11832]

Tuneout wrote:

Good points,however real estate can be a headache. If you plan on living in the property for the full mortgage term then cashing in on the equity assuming housing prices in your location are stable then I would say it’s a good investment.

Real estates tricky. I wouldn’t consider a primary residence an investment…you probably aren’t going to make money on it long term. After taxes and maintenance costs it simply boils down to you need a place to live and you’ll lose less money than you would if you rented something similar. Yeah its worth something and its an asset…but a primary residence isn’t exactly a money maker. Those who think they’ll downsize in retirement and use some house cash when they sell it to fund their retirement would have ended up with more money if they just bought a smaller place years ago and invested in stock or rentals instead.

[Anonymous 42]

hollowtips wrote:

Stocks, houses and businesses are assets.

You think so? Not anymore! They have things so f~~~ed up they’re twisting assets into liabilities! Material wealth vanishes as it’s just something else for them to justify new laws granting themselves the right to take and take and take, until there’s nothing is left to take.

But don’t worry, just like the soviet union after 70 years of confiscation then tried to give the land back to the once productive citizen of 70 years prior, but no takers, the farmland was robbed of its essential nutrients as government owned farming took away all the good and put nothing back.

[narwhalParticipant]

The difference between middle class and rich people is that middle class people buy liabilities and rich people acquire assets.

Simply enough put a liability cost money, or looses money, where as an asset makes you money. A car, clothing, vacations, woman, marriage are liabilities. Stocks, houses and businesses are assets.

That’s not exactly true. Rich people certainly have a car, clothing, vacations, woman and marriage. I’d say the difference is that the rich either have enough money that these liabilities don’t add up enough, as compared to their assets. Or, they minimize the liabilities and/or make an asset out of them.

Take the car for example. A rich dude may have a really nice car, but it’s a minor expense in comparison. He may also have chosen to get a good reliable used car that he can get long life out of with minimal maintenance. He spent a lot of time researching the car, which guaranteed he got the best value and kept him busy preventing him from having the time to spend money elsewhere. If he married, he married well to a woman who saw her role as complimenting her husband, not leaching off him.

You are correct though that much of the middle class will buy luxuries and take risks that the rich would not do if they had the same incomes.

All that said though, I do think life is to be enjoyed, and there is nothing wrong with spending on my on the stuff that’s going to make you happy. If you love being on the water, then buy the boat. Just avoid the fancy car if you don’t get much out of it, just because the jones have a fancy car.

Ok. Then do it.

[SolidusXParticipant 854]

I would mostly agree with you, however nowadays owning a home is more a liability than an asset. People forget there is insurance, upkeep, taxes, mortgage interest, strata fees, and property price bubbles that can deflate your asset into a very major liability.

I was looking at buying into real estate a while back and after I did the math realized I would be shelling out an extra almost $300K over 25 years for nothing when you add up all the fees and what not I listed above. $300K!!!! that’s insane… good luck trying to recoup that amount when you sell the house. Unless you have cash to buy a house outright or at least 50% of the cost.

I do a hybrid way of investing…. I will buy shares in companies that own real estate rental properties and just sit back and take in a dividend cheque every month. I have none of the hassle or costs of owning the property but I get all the reward.

Knowledge is power..... Don't waste your brain on bullshit

[hollowtipsParticipant 681]

narwhal wrote:

The difference between middle class and rich people is that middle class people buy liabilities and rich people acquire assets.

Simply enough put a liability cost money, or looses money, where as an asset makes you money. A car, clothing, vacations, woman, marriage are liabilities. Stocks, houses and businesses are assets.

That’s not exactly true. Rich people certainly have a car, clothing, vacations, woman and marriage. I’d say the difference is that the rich either have enough money that these liabilities don’t add up enough, as compared to their assets. Or, they minimize the liabilities and/or make an asset out of them.

So then the game should be to acquire assets to the point that they make more money than you spend. If you live frugally this is easily achievable, probably in half or even quarter of a decade.

[BeerParticipant 11832]

hollowtips wrote:

So then the game should be to acquire assets to the point that they make more money than you spend. If you live frugally this is easily achievable, probably in half or even quarter of a decade.

I was talking about this with a coworker recently. I told him in an average month I need about 1200 dollars a month to maintain my current standard of living. If I had 400k in the market I could cover that with dividends and no draw down. Why not live frugally, save hard, and get there fast as I can? I told him I could be financially independent probably by the end of 2018.

He told me I’m not living, you need so much more than that, he wants to be able to wake up in Paris one day and Athens the next and not have to worry about anything. He said he’ll need so much to achieve his goals its impossible for the average guy to save that much in a life time.

But like you say…the game is to get my assets to make me more money than I spend. Once I hit that minimum level I need to scrape by in life I’m not going to quit work the next day…I’m going to keep working and keep investing, and as my investments grow then I will inflate my lifestyle a bit because as far as I’m concerned, at that point the only reason I’m working anymore is to support lifestyle inflation. What my coworker totally failed to grasp is I set the bar low because I’m frugal, and I’ll get there fast because I’m frugal…but that’s not saying I can’t raise the bar once I get there. In order to have enough to travel the world care free, you first have to have enough to fund a basic lifestyle.

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