Assets and liabilities -Robert Kiyosaki

In 1997, when I released Rich Dad, Poor Dad, that book caused a bit of an upset because I said your house is not an asset. In today's world, if you want to be rich, you have to know the difference between assets versus liabilities. One of the reasons so many people are struggling financially today is simply because they're calling their liabilities assets, such as your house is not asset, your car is not asset, and things like that.
Very simply, when I was a young boy, my rich dad taught me. He says, "You have to understand a financial statement." This is an income statement. This is a balance sheet. Now this is overly simplified. He says what creates something to be an asset is very simply assets cashflow money into your pocket. Liability takes money from your pocket. For most people, their houses are not assets. They're liabilities because every month it takes money to live in that house.
Even those who say, "Well, I don't have any debt on my house. I've paid it off." Look, you still have insurance. You still have upkeep. You still have maintenance.
Let's me explain this. If this is a house and I rent the house out, and every month it's putting money in my pocket, more than my expenses, then that house is an asset. Now that very same house, if it goes unrented or somebody trashes it or whatever they do, that very same house can be a liability. A house can be an asset or a liability, depending upon the most important word in business. It's called cashflow.
Once again, if cash flows into your pocket, it's an asset. If cash flows out, it's a liability. I'm not saying don't buy a house. I'm just saying don't call a liability an asset. And that's what makes the Rich Dad Company different.

Best known as the author of Rich Dad Poor Dad—the #1 personal finance book of all time—Robert Kiyosaki has challenged and changed the way tens of millions of people around the world think about money. He is an entrepreneur, educator, and investor who believes that each of us has the power to makes changes in our lives, take control of our financial future, and live the rich life we deserve.

With perspectives on money and investing that often contradict conventional wisdom, Robert has earned an international reputation for straight talk, irreverence, and courage and has become a passionate and outspoken advocate for financial education.

Robert’s most recent books—Why the Rich Are Getting Richer and More Important Than Money—were published in the spring of this year to mark the 20th Anniversary of the 1997 release of Rich Dad Poor Dad. That book and its messages, viewed around the world as a classic in the personal finance arena, have stood the test of time. Why the Rich Are Getting Richer, released two decades after the international blockbuster bestseller Rich Dad Poor Dad, is positioned as Rich Dad Graduate School. Robert has also co-authored two books with Donald Trump, prior to his successful bid for the White House and election as President of the United States.

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[hubbyjose]

Thank Robert because I recently turned my house from a liability to an asset. You are making a difference in my life even in a Third World I'm trying like mine

[abramlucas]

Yes a house still cost you insurance, up keep, maintenance, taxes, repairs when something breaks which is different then up keep and maintenance, it's beyond that. I have a PHD friend (Poor, Hopeless and Desperate), who has a nice big house on the gulf course, which the indoor jacuzzi broke and sprung a leak and flooded the entire first floor! He was very upset to say the least, it cost ten's of thousands of dollars to repair the house properly. Even with top notch insurance (I believe if not mistaken). It took over a month to repair everything right. So yes that was a liability

[rodmanpararellax]

You have to do more animation video like this! It's easy to relate and understand than the Listen and Learn.

[khamissungura]

thanks, you are Professor, who reduce poverty in our world

[joymae]

Great explanation Robert! Your house is not an asset if the expenses outweigh the inflow of cash

[knpstrr]

Does Mr. Kiyosaki recommend paying off one's personal home (the liability) quicker than the given mortgage term? I'm pretty sure he does not recommend doing so (in general) on rental property.

[ivandate]

how about short term asset and long term asset?

[Satarte]

What if Im paying to rent a house I'm living it. If I buy my house without mortgage instead of renting someone else's house - isn't this an asset? I have to live somewhere, right?

[abramlucas]

I have one of my closest cousin's who has/had a few to several millions of dollars. He has/had a nice big house ($1M+ House and Property, real estate market there says it's really at least $3.5M) and he is/was always complaining about how expensive everything and anything is to do on his house, well it also has 3 acres. He has/had another house also about $800K+ with about 12 acres originally. He has/had the money he just hates spending it sometimes. I say to him big house BIG BILLS. He says yeah, yeah yeah. 😁

[gorangvashishth]

Mr Kiyosaki could you please recommend me some great books on Real Estate (BTW I'm a 14 year old student)

[mrsvoice]

So most important assets are just rental properties?idk what else is that I can do in my 20 except property, cause I don't have the money!

[abramlucas]

So yes a house can be an asset or a liability. Depending on how the cash flow goes, either into your asset column or your liability column. Asset column is

[golddragontv]

Mr kiyosaki can u do some more lesson with animation like that because human brain go good with pictures and video

[abramlucas]

A house = bills, a nice big house = BIG BILLS.

[abramlucas]

I second James G emotion I also feel the same for at least five years now, agreed!

[jyeung]

How are you going to tell people that they need to understand financial statements, but then go ahead and teach them incorrectly how to understand financial statements?

[flyingboi]

This is true cause
its what my dad did

[dickheadnumber]

so cash itself is a liability, because cash value depreciates every year so it's like cash flowing out of my pocket every year.

[golddragontv]

Mr kiyosaki I recommend all of my classmates to buy rich dad poor dad and I bring u a lots of customers 😂

[kylelsl]

will Rich Dad classify a car as an asset?