You don’t have to live like a hermit on the path to getting rich. In this article, we will show you How To Get Richer While Buying Liabilities.
How Most People Purchase Liabilities
When most people go about purchasing liabilities, they go about it backwards. Most end up with a negative net worth and are forced to work a job they hate to pay for the liability.
For example, Dana works a job where she is making $60,000 per year. She decides to purchase a brand new BMW 530i for $55,000. Her monthly car note is $800 and her insurance is $200 per month. With gas and upkeep her total expenses equal up to around $1,300 per month.
You may be thinking “Wow,” why would she purchase a car for that amount of money. Well, people are purchasing luxury cars they can’t afford every single day. The problem is that Dana is working a job she doesn’t like. Since her car payments are pretty high, it’s hard to quit her job and do what she really wants to do.
How The Rich Purchase Liabilities
The smart people who live the millionaire lifestyle do things differently. Although, they may finance a car, instead of paying for the car with their job they have assets that cover the car.
On the other hand, you have Kiara. Kiara wants to purchase a BMW 530i as well. However, she goes about it completely differently than Dana. Kiara decides to start her business on the side and eventually is able to get it to produce $2,000 per month in income while she has her full time job.
Kiara then decides to purchase the BMW 530i and uses the money she pays herself from her business to cover the car expenses. Instead of using her job to pay for the car she’s using an asset that can continue to increase her income and grow, long after the car is paid in full.
Make it a habit to create and purchase assets that produce income first, before getting any additional liabilities. Once the liability is paid off, you’ll have the asset that will continue to produce income for you. With this habit, you’ll be able to not only increase your income but also live the life of your dreams.
This is how you can become richer while purchasing liabilities.
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