Image

ASSETS – LIABILITIES = NET WORTH

In the first two lessons, we concentrated on the concept of assets and what you OWN, however, that is only one side of the coin and I would say the “positive” side.  But, for every ‘ying’, there is also a ‘yang’…the flip or “negative” side of the coin.  In this lesson, the flip side of the coin is called  LIABILITIES.  This concept is more prevalent and dare I say, more important than knowing your assets, because LIABILITIES are what you OWE!

Let’s think about Michael Jackson before his untimely death (R.I.P. King of of Pop).  Well, Michael Jackson had a great deal of assets…remember the ferris wheel at Neverland? The white glove? Ironically, which is currently hanging in the Mandalay Bay Hotel in Las Vegas  Although he had a plethora of assets, the man in the mirror actually OWED more than the value of those assets. That put him in a hole, which I still believe was the impetus for his early death. So, let’s take a deeper look at your LIABILITIES.

In laymen’s terms, an LIABILITY is something that you “OWE”!  That’s it…you OWE some person, business or entity (a debt).  You are in the hole!  Several years ago, a friend of mine named Cliff Goins IV wrote a book entitled, Stop Digging!:  A Spiritual Guide to Financial Freedom and Sound Stewardship, that you can still purchase on amazon.com (http://amzn.to/1iqIfov) I always loved that title because you cannot realize wealth until you did yourself out of the hole.

Some examples of LIABILITIES for individuals are:

 Image

Important terms from this lesson:

  1. Liabilities    –  Something that you OWE.
  2. Debt            –  The total value of your liabilities (how deep the hole is).

Action Step:       What LIABILITIES do you OWE?

Please print and complete the Liabilities Inventory Worksheet.  This may take a little effort, but force yourself to jot down every single item that you OWE and take a real inventory of the size of the hole that we have to dig from!  You absolutely need to understand what you OWE to determine how much digging will you need!

Click the link to download the Liabilities Inventory Worksheet – http://bit.ly/1iskbBV