Asset vs liability: An important lesson that rich people teach their children

The basic concept of accounting is all about assets and liabilities. To define, an asset is something you make money from while a liability is something you need to pay for. In order to have a profit, your assets should always be bigger than your liabilities.

In this particular story of a son and dad, the dad taught his son a lesson that will change the latter’s perspective of life forever.

It all started with the son asking his dad for a new car simply because the rest of his friends all have one of their own. He felt like he was left out.

Then, the dad answered that he is willing to give money to his son but he only has one condition. That is, the son should be able to invest his money first and earn something from it so that he can afford to buy the car of his dreams.

Months passed and the dad came back and asked his son about what happened with his investment. The son answered that it was going well but he no longer wanted to own a car. Instead, he wanted to invest more in order to earn more.

Upon hearing this, the dad was so happy that his son finally realized the lesson that he wanted him to learn. Overjoyed, he then handed the key to the newest car to his son.

The dad emphasized that people often try to attain things just to get the feeling of ‘belonging’ to the trend. Even if that thing is out of their reach which later turns into a liability and not an asset.

The biggest lesson we will ever learn from this is that investing for your future is something everyone should do. A little sacrifice today will surely reap fruits in the future.

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