This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
Add this step before you buy anything to transform your money
When we want to buy something that we can afford (even if we shouldn’t), we buy it and don’t think twice about how it might negatively impact our finances and goals. We also don’t think about investing more money into assets versus liabilities. Liabilities are often a lot more attractive than assets.
Most people remain in debt because they’re addicted to purchasing liabilities (e.g., houses, cars, education paid by student loans, clothes, shoes, technology, recreational “stuff,” dining experiences, travel, and entertainment). These same people never pause to review if their asset or liability column is leading the way in their financial portfolios. Of course, their liabilities are usually leading the way. Most people in America don’t own any assets. We rent to own our assets or rent others’ assets more often than not.
The next time you want to purchase a liability, think of an asset you could buy that covers the cost of the liability. Maybe it’s a course that will pay for itself with the revenue you make from it, a new product (e.g., book), an investment (e.g., crypto or private equity), or a new business. It doesn’t matter what the asset is as long as it covers the liability you’re about to purchase.
By including this additional step in your purchase process, you change the course of your financial portfolio and future. Not only will you have liabilities, but you will have assets that cover the costs of all of those liabilities. Soon you will have so many assets that your assets will cover the costs of all of the liabilities you choose to buy in the future. The goal is to always keep your asset column higher than your liability column.
You see, keeping the asset column higher than the liability column keeps you in the driver’s seat of your finances. You’re more of an owner than a borrower. Most people never graduate from borrower to asset owner, but you can by rethinking your purchases and focusing your efforts on increasing your assets instead of your liabilities. Shoot, you may want to stop buying so many liabilities and focus on buying assets after a while because you’ll come to realize the rewards are much greater.
If you do the opposite of what most people do, you’ll often be much better off financially.
Example
Liability
New Laptop: $3,000 with payment of $300/month
Asset
Short-Term Investment: $6,000 with a monthly return of 10%
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.