Asset Defined in Wiki: “In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent value of ownership that can be converted into cash.”
Liability Defined in Wiki: “A liability can mean something that is a hindrance or puts an individual or group at a disadvantage, or something that someone is responsible for, or something that increases the chance of something occurring (i.e. it is a cause). . . . a current obligation of an entity arising from past transactions or events”
Most folks think of assets and liabilities in the context of economics (money).
That’s easy to understand – An asset is something that has value and ADDS value over time – an appreciating thing that has a high probability of future reward.
Assets lift us . . .
Liabilities bear “Opportunity cost” . . . They are heavy . . . tend to hold us DOWN (back) . . . They cost us Time, energy, Money, and potentially restrict our freedom . . .
OH! and Liabilities tend to be creators of angst and worry . . . They are obligations that negatively impact our quality of life.
Many folks mistakenly accept liabilities under the pretense of IMPROVING Quality of life. The most easily recognized forms of these liabilities are the loan for the car (which Depreciates more every day) . . . or credit card use.
Assets and Liabilities are not necessarily all about money.
These principles apply in all aspects of our lives. Our relationships, our use of time, our diet, our exercise regimen, our business decisions.
When we “Prioritize” what comes at us, we sort out assets and liabilities . . . and are constantly evaluating what matters (and what doesn’t) . . . and trying to get the most out of our finite resources in order to life the highest quality of life possible.
Given all of the above . . . How much easier would decisions become if we ran everything through this simple “Asset? or Liability? Filter?
Consider:
- Relationships – Is this person lifting me up or dragging me down?
- Clients/Customers – Is the investment of marketing, time, attention, money an Investment in an asset? Or are they distracting you from more valuable work?
- Is that listing REALLY going to sell and is it worth the effort?
- Take out a sheet of paper and draw a line down the middle top to bottom.
- Write “ASSETS” at the top of the Left Column
- Write “LIABILITIES at the top of the Right column
- Consider every facet of your life and sort it all out
- Focus on MORE in the left column and LESS in the right column