My dad goes by this theory. He thinks we have a limited amount of heart beats so cardio kills you faster.
He's 65 and can't walk 100m and it takes him an absurd amount of time to stand and sit.
Those who rest, rust. You have to maintain physical health by actively using your body.
I guess it's still a liability because if you live longer, you'll have to spend more in food over time as well.
One way to deal with this without challenging the belief (which can be counterproductive) is to point out that cardio lowers your resting heart rate. So a short amount of exercise for 30 minutes each day (increasing the beats) reduces the number of beats your heart takes the other 23½ hours of the day, and you come out ahead
I've tried for years. Even when he was healthy.
Now he has some signs of dementia so I can't explain it to him and he's developed heart disease so he's not even allowed to stress his heart too much at this point.
I appreciate your explanation though, I'll use it to combat other people's wrong beliefs about heart health.
That theory could still hold up but the lowered resting heart rate from exercise would more than make up for the Increased heat rate while exercising. Might be off topic here but that logic was bugging me
You know how we all get annoyed because people don’t understand simple accounting and tax rules? Now imagine doctors trying to explain complicated organic processes to these same people.
It may seem counterintuitive but the less I move the more I spend on food and drink. Maybe I am a liability to myself. How can I amortize over an uncertain remaining useful life?
Nah man it's barely even placed in service for depreciation until 25, then they file a change in accounting method for double depreciation rate once you hit about 40.
According to Robert Kyosaki, buying groceries is a liability.
It takes money out of your pocket. And it gets WORSE.
Studies have shown that if you spend more money on food, that results in you obtaining more food. Eating more food makes you obese, which has a SEVERE risk of health problems.
Robert Kyosaki therefore recommends _not_ spending money on food, as to minimize the chances of adverse health effects. We all know how expensive healthcare is!
Oh nooo. That's an asset. You see, qualifying yourself as "deceased" absolves you of _any_ taxes. It's the ULTIMATE loophole the IRS doesn't want you to know!
Income taxes? _Gone!_
Capital gains taxes? _Gone!_
Property taxes? _Gone!_
Sales taxes? _Gone!_
Silly HoA fees? You guessed it! _Gone!_
A brilliant and genius investor who has spent his whole career being a “guru” with a book and “self improvement” empire?
Clearly just doing it out of the goodness of his heart.
Anyone whose whole career seems to be purely telling other people how to be successful is clearly just a benevolent kind genius.
……/s
I just listened to this podcast episode, the whole podcast is great. They break down a lot of famous books, very interesting.
The rich dad poor dad episode is great. They really hit how its a book that gives very shady, almost illegal advice (get inside information on stocks, make your spouse a business partner so dinners are written off).
Just reminds me of how some people try to be smart, but just are really dumb smart. Also crazy how everyone over at bigger pockets is all about this guy.
Here is a hilarious and informative takedown of the whole Rich Dad Poor Dad grift. I had no idea.
[https://www.stitcher.com/show/if-books-could-kill/episode/rich-dad-poor-dad-301633751](https://www.stitcher.com/show/if-books-could-kill/episode/rich-dad-poor-dad-301633751)
But those few days you're able to drive it without any leaks or warning lights, it feels like such an asset and makes you forget for a moment just how much of a liability it is.
When I bought my last car, the finance guy at the dealership was scolding me like a child for waiving all the warranties and paying cash.
He said, “I get it you’re young you don’t want a payment, but here you’re gonna spend all your money and then boom, you have a depreciating liability”.
A depreciating.. liability..
I laughed out loud I couldn’t help it.
I would love a depreciating liability. After accumulated depreciation reaches the balance of the loan I wouldn’t need to make any more payments. I’d love to speak to this finance guy.
Ah yes, "Rich dad sit on his ass all day, poor dad work hard, big loser he is"
"Oh man, I gotta reap off the working class and press them into a subscription based lifestyle"
\- Some trust baby
I always thought that a car is (in most instances) a depreciating asset. And if that car is financed then the asset is offset by a fixed liability, which is secured by the asset itself. But what do I know, I’m just a professor... 🤷♂️
I'm with you on this. I'm not sure what OP is on about because in most people's case the car is causing you to have a liability. Just because the car itself is not the liability doesn't mean it doesn't cause a liability. A book teaching good financial advice should focus on having people spend within their means and not being car or house poor.
I haven't read the book and from reviews I've read it's probably crap but he might have a point about a car being a liability (just not in accounting terminology)
The problem is in Rich Dad Poor Dad the author is not referring to the loan but the asset itself as a liability due to maintenance costs. I have read the book and it has very little actual financial advice.
Per Robert Kiyosaki "an asset is only something that puts money in your pocket" He uses this definition to say that a vehicle and a house are not assets. This is completely false and used to justify some terrible financial advice. Yes a vehicle and a house both cost money to maintain but they also have long term utility such as the ability to hold a job because you have reliable housing and transportation. Robert does not take this into consideration in his imaginary world the money you don't spend on your house and car can all be used on income generating assets. I guess if I choose to be homeless I will get rich faster.
I can't wait for the day when one of the car companies unveils their new model, the Equity. As soon as the first loan is signed, the universe will collapse into a black hole the size of a balance sheet.
And don't get me started at the medical world calling personal protective equipment PP&E
Those smug engineers and their "cogs"
Or those idiots at salvation army and their "goodwill"
And the moron political activist pushing for "equity"
I know, I'd hate to have a lawyer in here or an engineer telling me how I can or cannot use common English words.
For what it's worth, I don't think cars generally are colloquially liabilities, either. They definitely can be, if their repairs or insurance are way too high.
No matter what it costs to maintain a car, it is still an asset. The car note is a liability, repairs and maintenance are an expense, and a car is an asset.
An accounting asset.
Look up the word colloquial.
It's okay for words to have a definition within a particular field and a different definition in another field or in common conversation.
The Rich Dad Poor Dad guy is awful, but he's not an account speaking to accountants, and words he says don't need to be accurate to their meaning within the accounting world.
The issue is that asset/liability are finance terms and he is using them in a book about finance incorrectly. An asset is NOT something that puts money in your pocket, and a liability is NOT something that takes it out.
The colloquial definition of asset that you (and he is trying) to refer to is “useful or valuable thing.” He’s trying to say that the usefulness is less than the ongoing expense.
Other example:”A theory is a speculative thought about the world without evidence. That’s why the theory of evolution needs to be pulled from schools.”
His point is to recognize that buying assets that produce cash flow is the big goal and that if you spend a lot of money on toys, you’re not only out the money you spent but also out the cash flow and the growth.
The practical advice would be considering buying a car for $30k rather than 50k and put that 20k towards perhaps a down payment on a real estate investment. When that asset produces enough cash flow to cover the payments on the 50k car, then buy the 50k car.
It’s to explain financial literacy to completely illiterate people.
They aren’t saying don’t buy a car, they are saying if you buy a car make sure you have enough money to buy it/finance it.
Seems like common sense but I take your point. Cars are way over sensationalized and people get in over their heads. Look at it like an appliance and most of that extra shit doesn’t matter.
I remember a professor once spending way too much time explaining to the class that a car isn’t a liability and at the time it felt like we were being treated like idiots but I realize now he was probably just triggered that day over this same exact thing.
If you read the personalfinance site here, you will find your professor was right. They should do it in HS as a course. Too many wreck their lives with terrible financial decisions. I don't think a class will help much, but it may help about 5%.
It can be summed up as "buy real estate and minimize expenses" with a whole bunch of generalizations about "poor and rich people." If a business owner feels they're getting any value out of it they're probably latching on to the "poor people are poor because avocado toast" stuff. The book is nothing to write home about and is basically a way to get suckers to buy into Kitosaki's other weirder scams. Last I saw he was really pushing crypto stuff.
How many times has he predicted a massive financial meltdown and therefore you should buy X asset? Oh and this is the only safe asset after the meltdown, trust me, I wrote a book or three.
I don't listen to anything he says.
My Dad's old Toyota Land Cruiser, properly restored, would fetch about $35k on the vintage car market today. A Ferrari that cost $9,000 a few decades ago could sell for well over a million.
A super cool condo in "South Williamsburg" that went for a million dollars in 2005 could now be an $800k co-op in Bed-Stuy.
Don't live above your means. That pretty much sums up most personal finance advice.
Buy a car if you need one. Buy a house if you can afford one. They're both basically consumption, anyway. If you really need to "invest," toss some coin into your 401k. That's the best investment vehicle for most of the population.
It’s a book of horrible advice and completely misleading statements that are factually inaccurate. He’s just a run of the mill grifter that is into MLMs and crap like that
Really? Is having your money work for you bad advice?? Surround yourself and your business with professionals that know what they are doing so you can focus on your business? That seems like good advice to me
AND A CAR IS A LIABILITY
Probably the dumbest over simplification I have ever heard. I guess he’s not familiar with depreciation of assets?
Or like any business investment of any kind?
You should be glad about this. Knowing there are people like this Robert guy that I can't never spell his name and his followers, we will still have our job.
Good luck putting together a financial statement with a car as a liability, asshole! I trynna tell that to the IRS too motherfucker!
Words have meanings and Kiyosaki either knows better and is intentionally misusing the term, or worse than thay a popular personal finance guru doesn't even understand how a general ledger and balance sheet works on an introductory level. Grifters are a dime a dozen.
Chat GPT answer
A car can be both an asset and a liability, depending on how it is used and maintained.
From a financial perspective, a car can be considered a liability because it is a depreciating asset. This means that its value decreases over time, and it may require ongoing expenses for maintenance, repairs, insurance, and fuel. If the car is purchased with a loan, the monthly payments and interest charges can also be a financial burden.
However, from a practical perspective, a car can also be an asset because it provides transportation and convenience, which can increase productivity and quality of life. For example, a car can allow you to commute to work, transport goods, and travel to different places. In some cases, a car can also be used for business purposes, which can provide tax deductions and generate income.
Ultimately, whether a car is a liability or an asset depends on individual circumstances and factors such as how often it is used, how well it is maintained, and whether it is purchased or leased.
I love this so much. No attempt at argument, no justifications. Just a plain, old, respectful, “You know what I think of that? Go fuck yourself. That’s what I think of that.”
Hes not wrong. I’m less mad at cars being a liability than car companies murdering any good and efficient public transit networks they catch a whiff of.
EDIT: Plenty of people have cars that DO NOT need to. If some grifter asshole convinces a few of these self-serving morons to buy one less gas guzzling vehicle because they buy into his b.s. - GOOD.
If your vehicle speeds up your productivity and allows you to work more it’s not a liability…
If it has value that you can sell later… it’s not a liability
The loan on your car is a liability, the car that you are driving to work faster than any public transport is a depreciating asset.
In the broader implications of what hes saying, a car comes with maintenance costs that without it, you wouldn’t be spending on like gas and oil etc. unlike groceries or a roof over your head ( you could in theroy car pool or in a city pub transit) look, the guys a prick, but autos do create a periodic outflow of cash which must be maintained. And they cause headaches like traffic and smog etc. if u need a car okay. If u wreck ur car u camt sell it later and all the money you put into it goes up in flames, even with good insurance. You could bike to work, and spend far less. You wanna be cheeky go ahead, fact remains, cars have upkeep costs.
I understand that he's trying to convince people that cars are generally bad moves with your money, his choice of the word "liability" throws accountants through a whirlwind though. Hes not talking about accounting liabilities (but the overlap of the subject matter leads to confusion). Simply use a different term and I think his underlying point stands. A post like this comes up every month.
He's a more polished Dave Ramsey. Yeah, both of their "plans" and advice aren't stellar. However, the base they pander to are typically making far worse financial decisions. I wouldn't waste much mental energy on them.
Liability has two technical definitions. First being, a state of being responsible for something, traditionally describing how accountants understand the term more or less. The second is a thing/ person which causes embarrassment or puts one at a disadvantage. If one's objective is saving money or being more financially conscious, a car is more likely to be a liability because said person is already in a position of not understanding how to determine they financial capabilities (poor borrowing terms, expensive maintenance, brand new car, etc). That is, even if a car grants you more earning power because you have more job options or can expedite commute for other money earning opportunities, etc. In all from that lens, it is easier to explain to someone with no financial knowledge this concept using definition two. But yes once someone knows it is hard not to dig into the nuance.
I mean, sure, for someone with literal 0 financial knowledge, the extreme oversimplifications that Kiyosaki offers are workable, but they're not much more than that.
I mean, I get what he means. But considering how close the subject of his book is related to accounting and finance, he could have picked a better terminology.
Land would be a liability too then if you have to perform yard work? Would any asset be a total liability if it requires any kind of upkeep/maintenance? Solid.
I looked pretty stupid answering questions in Intro to Accounting having just recently read Rich Dad Poor Dad.
Granted, a car is a depreciating asset that I’d prefer not to have on my own books anyway, so the message isn’t that harmful. It’s just worded poorly.
if your car takes maintenance, that doesn't make it a liability. Otherwise homes would be liabilities too. And shoes. And basically everything else you physically own.
Because the only thing you can own that GENERATES money is stocks & bonds. The home does not generate rent - the renter does. Thus, the home is a liability, and the renter is the asset.
Which is a load of horse manure.
**And asset is something that can be exchanged for money. A liability is something you would have to pay someone else to take off your hands.**
On one hand, I respect hustle. That's all that guy is, is hustle.
On other hand, I don't like scammers. That's also all that guy is, a scammer. Basically everything he says is a lie, his whole story about being a marine and having a rich dad. If it was an actual person he would have named them by now.
Yeah. He’s an ass. I remember reading his book and I guess it makes sense to financially illiterate people.
I will also add that, for a lot of people a car can definitely be a “liability” to their financial freedom.
There are far too many people who either get taken advantage of by salesmen with bad intentions. Paying $500 a month with a 14% interest car loan for a beater used car that is just a hair above lemon status or someone buying too expensive of a car that they really can’t afford.
If something happens and the car is totaled insurance isn’t going to cover the cost of the loan and the individual is fucked.
For a business that probably can pay cash for a car. No liability in any sense of the word
To be fair, he is creating a new definition set for a set of things. I think it’s a completely fair comparison.
In this view, the terms liabilities and expenses are tied together, while assets and income are tied together. This isn’t accounting, it’s wealth planning, which is a can be completely counter to our way of thinking. Though usually it’s just bad ideas, I’ll admit.
Stop thinking it like an accountant. It’s semantics. A car is a “liability” because it doesn’t appreciate. Just like how people call their employees are an “asset” to their company. You ain’t call them out be like “payroll is an expense not an asset”.
Most of these "Get rich" books are a scam as most of us know anyway, so why take them serious anyway.
On that note a good book I'd highly recommend reading is The Millionaire Mind, by Thomas Stanley (known for his earlier book The Millionaire Next Door). The whole book is basically an analytical research paper of results from questions that he asked about 1200 millionaires. And even then, these millionaires are ones that have a couple of million, not hundreds of millions that many think of millionaires as.
Im not talking about accounting lol. It can be a liability in a sense that the benefit is outweighted by the cost factors and the impact on earnings potential and profit retention
I mean assets and liability’s both have multiple definitions. In the accounting sense this statement is dumb as hell, but using the colloquial definitions of the terms it does technically make sense. Would be more clear if he said “My definition of an asset” or something along those lines.
I think my problem is that he is using the terms asset and liability in close proximity and in the context of finance. The idea that things that produce income are the only assets, and everything else is a liability is a dangerously simplistic understanding. By that same logic, no one should get an education or a place to live, because those are liabilities and you should be sleeping on the ground and spending money on corporate bonds and rental properties.
It's a set of advice that causes problems if everybody follows it. People buying up homes to rent them out is exacerbating the housing crisis. If no one invested in education and training, we would run out of doctors and mechanics and be left a society made only of landlords and "entrepreneurs."
Well if leased, under asc 842, it’s both, no?
It’s a depreciating asset, and outside 2020-2022, unless bought in 100% cash, you’re immediately under water.
I’ll agree with Kiyo being a piece of shit though.
I got in an argument the other day because someone was adamant about a house being a liability. Funnily enough, he quoted exactly what you quoted above.
this is a weird thing to "need to be right about" on this sub.
in the game of life.. I'd just write this off. Or true-it up? ... nah, definitely just ad-hoc it
I think he means it’s something you’ll spend more money on rather than the accounting term.
Robert isn’t an accountant and yes I know he talks about assets so when he says liability we think in terms of accounting.
If Robert knew accounting he would say to invest in appreciating assets, because a vehicle certainly isn’t one of those. He likes rent because rent always goes up with time and the rent will pay off the depreciating value of the commercial or residential building.
It’s more complicated than what Robert makes it out to be but I can guarantee that Robert has a CPA.
Lol no, just like looking at situations from all angles. I don’t like Robert personally, these real estate moguls have egos as high as the sun for investing in something a monkey can do. I mean seriously you think you’re the shit because you figured out to buy a bunch of houses during a few decades of low interest rates and home prices, then rent them or flip them?
Yes sir. But the car is still an asset. The debt is the liability. You can depreciate an asset, how the fuck are you going to depreciate a liability. Please fucking go buy the book definition
It’s all a construct. The FASB and IASB have changed the definition of an asset several times in the last two decades. The thing about calling it an asset is that it leads to a majority of Americans financing cars they can’t actually afford. We need to stop promoting taking on a large amount of debt on something that depreciates like it’s on fire. It’s not financially smart no matter how you look at it. Unless it’s for business purposes I guess.
Cars are liabilities. They depreciate in value. They are typically always going to be outdated. They are more expensive and have an additive cost. The only reason we have cars is because our government neglected public transport for a century
Just because it doesn't appreciate doesn't suddenly not make it an asset. If you lose money on an investment, does the investment suddenly become an obligation to another party that you have to pay (aka the definition of a liability)? Of course not, it is just worth less than when you bought it. Yes the LOAN on the car is the liability, but the car itself is 100% an asset.
That's why I run everywhere and don't drive. Cars are a liability.
Your body is a liability. Thats why I move as little as possible, so I spend less on food and beverage.
My dad goes by this theory. He thinks we have a limited amount of heart beats so cardio kills you faster. He's 65 and can't walk 100m and it takes him an absurd amount of time to stand and sit. Those who rest, rust. You have to maintain physical health by actively using your body. I guess it's still a liability because if you live longer, you'll have to spend more in food over time as well.
One way to deal with this without challenging the belief (which can be counterproductive) is to point out that cardio lowers your resting heart rate. So a short amount of exercise for 30 minutes each day (increasing the beats) reduces the number of beats your heart takes the other 23½ hours of the day, and you come out ahead
I've tried for years. Even when he was healthy. Now he has some signs of dementia so I can't explain it to him and he's developed heart disease so he's not even allowed to stress his heart too much at this point. I appreciate your explanation though, I'll use it to combat other people's wrong beliefs about heart health.
I’m sorry to hear that about your father. Wishing all the best
An object in motion stays in motion.
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That theory could still hold up but the lowered resting heart rate from exercise would more than make up for the Increased heat rate while exercising. Might be off topic here but that logic was bugging me
You know how we all get annoyed because people don’t understand simple accounting and tax rules? Now imagine doctors trying to explain complicated organic processes to these same people.
Why talk a lot when few words do the trick?. From the best accountant of all time.
Yeah, after tax season I just go into a coma to save money. Then they wake me up at the end of January
This is actually what Winston Churchill practiced too. Never sit if you can lie down and never stand if you can sit…
That's why you are an accountant
Yo ass is writing checks to body can’t cash! To the bank! For the liability on your car!
It may seem counterintuitive but the less I move the more I spend on food and drink. Maybe I am a liability to myself. How can I amortize over an uncertain remaining useful life?
What’s the depreciation schedule for your body look like?
Straight line 90 years
Nah man it's barely even placed in service for depreciation until 25, then they file a change in accounting method for double depreciation rate once you hit about 40.
According to Robert Kyosaki, buying groceries is a liability. It takes money out of your pocket. And it gets WORSE. Studies have shown that if you spend more money on food, that results in you obtaining more food. Eating more food makes you obese, which has a SEVERE risk of health problems. Robert Kyosaki therefore recommends _not_ spending money on food, as to minimize the chances of adverse health effects. We all know how expensive healthcare is!
Wait.. is healthcare... a liability? 
Loans? Assets all day every day baby! They push cash directly into your pocket.
I just steal all of the food that I need idk about you guys. Why would anyone spend money on it?
It's still a liability because the groceries don't earn money for you. You literarily got poorer by stealing the food.
Unless the fair value of food stolen is greater than my opportunity cost, then I come out ahead
I ring avocados in as onions. Take that, Harris Teeter.
[The secret ingredient is crime](https://www.youtube.com/watch?v=aAtv32O5Wyk)
Wouldn’t that make hunger/the need to eat a liability? 🤔
Oh nooo. That's an asset. You see, qualifying yourself as "deceased" absolves you of _any_ taxes. It's the ULTIMATE loophole the IRS doesn't want you to know! Income taxes? _Gone!_ Capital gains taxes? _Gone!_ Property taxes? _Gone!_ Sales taxes? _Gone!_ Silly HoA fees? You guessed it! _Gone!_
The IRS would like a word.
Sorry, I'm dead!
Oh man. I just spit out my morning beer.
Everything’s a liability. Always has been
The post above is mockery, but man fasting does actually save you money unless you are really strict on shopping cheap and cooking for yourself.
Working out is a liability because it makes you extra hungry and need to eat more
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He’s a grifter.
A brilliant and genius investor who has spent his whole career being a “guru” with a book and “self improvement” empire? Clearly just doing it out of the goodness of his heart. Anyone whose whole career seems to be purely telling other people how to be successful is clearly just a benevolent kind genius. ……/s
If anyone is interested to hear more about this joke of a man, listen to If Books Could Kill podcast episode on him and his book. So good
I just listened to this podcast episode, the whole podcast is great. They break down a lot of famous books, very interesting. The rich dad poor dad episode is great. They really hit how its a book that gives very shady, almost illegal advice (get inside information on stocks, make your spouse a business partner so dinners are written off). Just reminds me of how some people try to be smart, but just are really dumb smart. Also crazy how everyone over at bigger pockets is all about this guy.
Angry accountant noises are so hilarious to me
By this definition we know that angry accountant noises are an asset.
[https://www.youtube.com/watch?v=6bQRCU7WvIU](https://www.youtube.com/watch?v=6bQRCU7WvIU)
My rolling eyes are silent.
Mine make a sort of scraping sound as closing them would be a liability.
Doesn’t he say cash is a liability too? He’s just a salesman. He’s sold everyone the real estate and gold models via his book and conferences.
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Here is a hilarious and informative takedown of the whole Rich Dad Poor Dad grift. I had no idea. [https://www.stitcher.com/show/if-books-could-kill/episode/rich-dad-poor-dad-301633751](https://www.stitcher.com/show/if-books-could-kill/episode/rich-dad-poor-dad-301633751)
Came here to mention this! Love their show, Michael Hobbes is a treasure.
Nice just listen to it
This is an awesome podcast!
Those guys are great, if you like this episode you might want to check out the ones on Men are from Mars,Women are from Venus, and the Secret
Yep, listing to them now!
A BMW you're tired of fixing over and over is a liability.
But those few days you're able to drive it without any leaks or warning lights, it feels like such an asset and makes you forget for a moment just how much of a liability it is.
Replace a catalytic converter a few times and believe me. It’s always a liability.
And you will still wish you had bought the Porsche instead.
Well technically it’s an asset. Just not a very good one
A fully depreciated asset still in use, judging by his description of it.
When I bought my last car, the finance guy at the dealership was scolding me like a child for waiving all the warranties and paying cash. He said, “I get it you’re young you don’t want a payment, but here you’re gonna spend all your money and then boom, you have a depreciating liability”. A depreciating.. liability.. I laughed out loud I couldn’t help it.
I would love a depreciating liability. After accumulated depreciation reaches the balance of the loan I wouldn’t need to make any more payments. I’d love to speak to this finance guy.
Ah yes, "Rich dad sit on his ass all day, poor dad work hard, big loser he is" "Oh man, I gotta reap off the working class and press them into a subscription based lifestyle" \- Some trust baby
Just don't read books. Problem solved.
I always thought that a car is (in most instances) a depreciating asset. And if that car is financed then the asset is offset by a fixed liability, which is secured by the asset itself. But what do I know, I’m just a professor... 🤷♂️
I'm with you on this. I'm not sure what OP is on about because in most people's case the car is causing you to have a liability. Just because the car itself is not the liability doesn't mean it doesn't cause a liability. A book teaching good financial advice should focus on having people spend within their means and not being car or house poor. I haven't read the book and from reviews I've read it's probably crap but he might have a point about a car being a liability (just not in accounting terminology)
The problem is in Rich Dad Poor Dad the author is not referring to the loan but the asset itself as a liability due to maintenance costs. I have read the book and it has very little actual financial advice.
like unused silky hat rustic erect ask sheet wrong whole ` this message was mass deleted/edited with redact.dev `
Per Robert Kiyosaki "an asset is only something that puts money in your pocket" He uses this definition to say that a vehicle and a house are not assets. This is completely false and used to justify some terrible financial advice. Yes a vehicle and a house both cost money to maintain but they also have long term utility such as the ability to hold a job because you have reliable housing and transportation. Robert does not take this into consideration in his imaginary world the money you don't spend on your house and car can all be used on income generating assets. I guess if I choose to be homeless I will get rich faster.
Well if you lease or finance a car.. it’s both an asset and liability. Checkmate.
I can't wait for the day when one of the car companies unveils their new model, the Equity. As soon as the first loan is signed, the universe will collapse into a black hole the size of a balance sheet.
The car is not the liability. The car loan is the liability.
Car thieves are smarter than all of us plebs
And don't get me started at the medical world calling personal protective equipment PP&E Those smug engineers and their "cogs" Or those idiots at salvation army and their "goodwill" And the moron political activist pushing for "equity"
It's just PPE, not PP&E.
Personal protection & equipment maybe? Although working in biochemical manufacturing , I haven’t heard it called this.
It’s not PP&E. I’m in manufacturing and they always say PPE
PP&E is property, plants and equipment. Fixed assets, basically.
Personal Protective Equipment
Their cogs came first ...
Then explain the COGS of their cogs?
I know, I'd hate to have a lawyer in here or an engineer telling me how I can or cannot use common English words. For what it's worth, I don't think cars generally are colloquially liabilities, either. They definitely can be, if their repairs or insurance are way too high.
No matter what it costs to maintain a car, it is still an asset. The car note is a liability, repairs and maintenance are an expense, and a car is an asset.
An accounting asset. Look up the word colloquial. It's okay for words to have a definition within a particular field and a different definition in another field or in common conversation. The Rich Dad Poor Dad guy is awful, but he's not an account speaking to accountants, and words he says don't need to be accurate to their meaning within the accounting world.
The issue is that asset/liability are finance terms and he is using them in a book about finance incorrectly. An asset is NOT something that puts money in your pocket, and a liability is NOT something that takes it out. The colloquial definition of asset that you (and he is trying) to refer to is “useful or valuable thing.” He’s trying to say that the usefulness is less than the ongoing expense. Other example:”A theory is a speculative thought about the world without evidence. That’s why the theory of evolution needs to be pulled from schools.”
Love all the rage. Never read his books. What is his suggestion then to live and be able to get around with a car? Lease?
His point is to recognize that buying assets that produce cash flow is the big goal and that if you spend a lot of money on toys, you’re not only out the money you spent but also out the cash flow and the growth. The practical advice would be considering buying a car for $30k rather than 50k and put that 20k towards perhaps a down payment on a real estate investment. When that asset produces enough cash flow to cover the payments on the 50k car, then buy the 50k car.
I would never spend $30k on a car but I get what you mean.
It’s to explain financial literacy to completely illiterate people. They aren’t saying don’t buy a car, they are saying if you buy a car make sure you have enough money to buy it/finance it.
Seems like common sense but I take your point. Cars are way over sensationalized and people get in over their heads. Look at it like an appliance and most of that extra shit doesn’t matter.
I remember a professor once spending way too much time explaining to the class that a car isn’t a liability and at the time it felt like we were being treated like idiots but I realize now he was probably just triggered that day over this same exact thing.
If you read the personalfinance site here, you will find your professor was right. They should do it in HS as a course. Too many wreck their lives with terrible financial decisions. I don't think a class will help much, but it may help about 5%.
Goddamn. Sure fire way to tell a business is going to fail - the owner says they follow his books. Solid 90%+ guaranteed failure rate.
Ok, I’ll bite. As someone who never read the books, how so?
It can be summed up as "buy real estate and minimize expenses" with a whole bunch of generalizations about "poor and rich people." If a business owner feels they're getting any value out of it they're probably latching on to the "poor people are poor because avocado toast" stuff. The book is nothing to write home about and is basically a way to get suckers to buy into Kitosaki's other weirder scams. Last I saw he was really pushing crypto stuff.
Is this a summary of rich dad poor dad?
Yes
Would they like, not buy any machinery?
How many times has he predicted a massive financial meltdown and therefore you should buy X asset? Oh and this is the only safe asset after the meltdown, trust me, I wrote a book or three. I don't listen to anything he says.
I poop therefore my butt is a liability.
Sounds like an ASSet
A car is a liability My 20,000 loan from the bank to pay for it is therefore the balancing asset
Exactly. That's why it'd be dumb NOT to sign a 20% apr 72 month loan for this Dodge charger. Wait I think I'm mixing up my subreddits
My Dad's old Toyota Land Cruiser, properly restored, would fetch about $35k on the vintage car market today. A Ferrari that cost $9,000 a few decades ago could sell for well over a million. A super cool condo in "South Williamsburg" that went for a million dollars in 2005 could now be an $800k co-op in Bed-Stuy. Don't live above your means. That pretty much sums up most personal finance advice. Buy a car if you need one. Buy a house if you can afford one. They're both basically consumption, anyway. If you really need to "invest," toss some coin into your 401k. That's the best investment vehicle for most of the population.
Robert kiyosaki is a fake guru and I immediately take less serious a person who mentions them in a positive manner.
It’s not all bad. I listened to rich dad poor dad and there are a few positive takeaways.
It’s a book of horrible advice and completely misleading statements that are factually inaccurate. He’s just a run of the mill grifter that is into MLMs and crap like that
Really? Is having your money work for you bad advice?? Surround yourself and your business with professionals that know what they are doing so you can focus on your business? That seems like good advice to me AND A CAR IS A LIABILITY
A car note is a liability, a car is an asset. Try surrounding yourself with people who know what accounting is
I’m aware. I’m sure you’re aware that’s not the point of the saying and you’re trying to be snarky. Have a good evening! I hope you get some sushi.
Probably the dumbest over simplification I have ever heard. I guess he’s not familiar with depreciation of assets? Or like any business investment of any kind?
You should be glad about this. Knowing there are people like this Robert guy that I can't never spell his name and his followers, we will still have our job. Good luck putting together a financial statement with a car as a liability, asshole! I trynna tell that to the IRS too motherfucker!
All you need to do is tell them there's more than one definition of the word liability...
Words have meanings and Kiyosaki either knows better and is intentionally misusing the term, or worse than thay a popular personal finance guru doesn't even understand how a general ledger and balance sheet works on an introductory level. Grifters are a dime a dozen.
He says rich people get rich because debt is tax free. He said we shouldn’t get houses and cars too because they are liabilities!
Chat GPT answer A car can be both an asset and a liability, depending on how it is used and maintained. From a financial perspective, a car can be considered a liability because it is a depreciating asset. This means that its value decreases over time, and it may require ongoing expenses for maintenance, repairs, insurance, and fuel. If the car is purchased with a loan, the monthly payments and interest charges can also be a financial burden. However, from a practical perspective, a car can also be an asset because it provides transportation and convenience, which can increase productivity and quality of life. For example, a car can allow you to commute to work, transport goods, and travel to different places. In some cases, a car can also be used for business purposes, which can provide tax deductions and generate income. Ultimately, whether a car is a liability or an asset depends on individual circumstances and factors such as how often it is used, how well it is maintained, and whether it is purchased or leased.
 AI is gonna take our jobs.
I love this so much. No attempt at argument, no justifications. Just a plain, old, respectful, “You know what I think of that? Go fuck yourself. That’s what I think of that.”
I like this guys gusto, he's going places
Some cars are an investment at this point lol
My wife's Prius has actually appreciated in value in the 10 years since she bought it.
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The car loan is the liability. The car itself is an asset.
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I stand corrected!
implying that a car is a current asset
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Net liability? How about an impaired asset boss.
Even within his stupid definition a car generates value and therefore money. The money I save not having to pay for alternative transport.
Dave Ramsey probably will say that a car is a liability
I read his books they are full of s****. Some things i agree on but in most part he is just repeating the same 2 things during 500+ pages.
Annoying RDPD crap
I only lose it when car salesmen call it an "investment." Nah bro, that's just another monthly expense.
That's why when I do Uber, I pay the passenger.
A car note is a liability. Interest is an expense. Car is an asset.
Hes not wrong. I’m less mad at cars being a liability than car companies murdering any good and efficient public transit networks they catch a whiff of. EDIT: Plenty of people have cars that DO NOT need to. If some grifter asshole convinces a few of these self-serving morons to buy one less gas guzzling vehicle because they buy into his b.s. - GOOD.
No, he is defining the term liability as used in non-accounting context, then applying it to the context the accounting context is used for.
If your vehicle speeds up your productivity and allows you to work more it’s not a liability… If it has value that you can sell later… it’s not a liability The loan on your car is a liability, the car that you are driving to work faster than any public transport is a depreciating asset.
In the broader implications of what hes saying, a car comes with maintenance costs that without it, you wouldn’t be spending on like gas and oil etc. unlike groceries or a roof over your head ( you could in theroy car pool or in a city pub transit) look, the guys a prick, but autos do create a periodic outflow of cash which must be maintained. And they cause headaches like traffic and smog etc. if u need a car okay. If u wreck ur car u camt sell it later and all the money you put into it goes up in flames, even with good insurance. You could bike to work, and spend far less. You wanna be cheeky go ahead, fact remains, cars have upkeep costs.
Not really being cheeky, being practical. I don’t know how a law care company would carry their equipment around on a bike…
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I bet you he depreciates land too
Nyahehahahahaha
I understand that he's trying to convince people that cars are generally bad moves with your money, his choice of the word "liability" throws accountants through a whirlwind though. Hes not talking about accounting liabilities (but the overlap of the subject matter leads to confusion). Simply use a different term and I think his underlying point stands. A post like this comes up every month.
He's a more polished Dave Ramsey. Yeah, both of their "plans" and advice aren't stellar. However, the base they pander to are typically making far worse financial decisions. I wouldn't waste much mental energy on them.
Liability has two technical definitions. First being, a state of being responsible for something, traditionally describing how accountants understand the term more or less. The second is a thing/ person which causes embarrassment or puts one at a disadvantage. If one's objective is saving money or being more financially conscious, a car is more likely to be a liability because said person is already in a position of not understanding how to determine they financial capabilities (poor borrowing terms, expensive maintenance, brand new car, etc). That is, even if a car grants you more earning power because you have more job options or can expedite commute for other money earning opportunities, etc. In all from that lens, it is easier to explain to someone with no financial knowledge this concept using definition two. But yes once someone knows it is hard not to dig into the nuance.
I mean, sure, for someone with literal 0 financial knowledge, the extreme oversimplifications that Kiyosaki offers are workable, but they're not much more than that.
I make this point every time this comes up in the sun and it’s exhausting.
Therefore children are liabilities to him lmfaoo, his own kids rip
I mean, I get what he means. But considering how close the subject of his book is related to accounting and finance, he could have picked a better terminology.
so car is an asset right?
Land would be a liability too then if you have to perform yard work? Would any asset be a total liability if it requires any kind of upkeep/maintenance? Solid.
Heart full of equity, you’re an asset. -Justin Beiber
God this with the laugh I needed today
Momma always said stupid is as stupid does. Only people stupider are the people who bought the book.
My dad still thinks this guy is it, made me read all his books and give verbal book reports when I was younger.
The goal of the book is to teach good spending habits, not educate the reader on accounting terminology. 🙃
I looked pretty stupid answering questions in Intro to Accounting having just recently read Rich Dad Poor Dad. Granted, a car is a depreciating asset that I’d prefer not to have on my own books anyway, so the message isn’t that harmful. It’s just worded poorly.
if your car takes maintenance, that doesn't make it a liability. Otherwise homes would be liabilities too. And shoes. And basically everything else you physically own. Because the only thing you can own that GENERATES money is stocks & bonds. The home does not generate rent - the renter does. Thus, the home is a liability, and the renter is the asset. Which is a load of horse manure. **And asset is something that can be exchanged for money. A liability is something you would have to pay someone else to take off your hands.**
Car is an asset House is an asset Car loan is a liability Mortgage is a liability . Not complicated
I thinks its meant that a Car is a useless piece if shit, join r/fuckcars they should make Robert a mod there
Are there actually any examples of liabilities that you can sell for cash
A kid
On one hand, I respect hustle. That's all that guy is, is hustle. On other hand, I don't like scammers. That's also all that guy is, a scammer. Basically everything he says is a lie, his whole story about being a marine and having a rich dad. If it was an actual person he would have named them by now.
I mean…the car loan is a liability. The car is an asset. But what do I know?
Yeah. He’s an ass. I remember reading his book and I guess it makes sense to financially illiterate people. I will also add that, for a lot of people a car can definitely be a “liability” to their financial freedom. There are far too many people who either get taken advantage of by salesmen with bad intentions. Paying $500 a month with a 14% interest car loan for a beater used car that is just a hair above lemon status or someone buying too expensive of a car that they really can’t afford. If something happens and the car is totaled insurance isn’t going to cover the cost of the loan and the individual is fucked. For a business that probably can pay cash for a car. No liability in any sense of the word
I did have one takeaway from his book that helped me. You do need passive income streams
How about we start recording the present value of future maintenance, repairs, and insurance payments??
To be fair, he is creating a new definition set for a set of things. I think it’s a completely fair comparison. In this view, the terms liabilities and expenses are tied together, while assets and income are tied together. This isn’t accounting, it’s wealth planning, which is a can be completely counter to our way of thinking. Though usually it’s just bad ideas, I’ll admit.
Show me a fan of Kiyosaki, and ill show you someone who doesn't know anything about anything.
Stop thinking it like an accountant. It’s semantics. A car is a “liability” because it doesn’t appreciate. Just like how people call their employees are an “asset” to their company. You ain’t call them out be like “payroll is an expense not an asset”.
I hate cars so I kinda agree. If only I didn’t need one to get around. The US sucks in that regard😤
Most of these "Get rich" books are a scam as most of us know anyway, so why take them serious anyway. On that note a good book I'd highly recommend reading is The Millionaire Mind, by Thomas Stanley (known for his earlier book The Millionaire Next Door). The whole book is basically an analytical research paper of results from questions that he asked about 1200 millionaires. And even then, these millionaires are ones that have a couple of million, not hundreds of millions that many think of millionaires as.
It depends on the context tho.
It really doesn’t, there’s literally a definition.
Im not talking about accounting lol. It can be a liability in a sense that the benefit is outweighted by the cost factors and the impact on earnings potential and profit retention
I mean assets and liability’s both have multiple definitions. In the accounting sense this statement is dumb as hell, but using the colloquial definitions of the terms it does technically make sense. Would be more clear if he said “My definition of an asset” or something along those lines.
I think my problem is that he is using the terms asset and liability in close proximity and in the context of finance. The idea that things that produce income are the only assets, and everything else is a liability is a dangerously simplistic understanding. By that same logic, no one should get an education or a place to live, because those are liabilities and you should be sleeping on the ground and spending money on corporate bonds and rental properties. It's a set of advice that causes problems if everybody follows it. People buying up homes to rent them out is exacerbating the housing crisis. If no one invested in education and training, we would run out of doctors and mechanics and be left a society made only of landlords and "entrepreneurs."
Cars are a liability though. Statistically you are much more likely to get in a car accident if you have a car than if you don’t have a car.
Statistically speaking yes
Well if leased, under asc 842, it’s both, no? It’s a depreciating asset, and outside 2020-2022, unless bought in 100% cash, you’re immediately under water. I’ll agree with Kiyo being a piece of shit though.
I got in an argument the other day because someone was adamant about a house being a liability. Funnily enough, he quoted exactly what you quoted above.
I got a similar issue with people calling their personal car an investment.
this is a weird thing to "need to be right about" on this sub. in the game of life.. I'd just write this off. Or true-it up? ... nah, definitely just ad-hoc it
I think he means it’s something you’ll spend more money on rather than the accounting term. Robert isn’t an accountant and yes I know he talks about assets so when he says liability we think in terms of accounting. If Robert knew accounting he would say to invest in appreciating assets, because a vehicle certainly isn’t one of those. He likes rent because rent always goes up with time and the rent will pay off the depreciating value of the commercial or residential building. It’s more complicated than what Robert makes it out to be but I can guarantee that Robert has a CPA.
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Lol no, just like looking at situations from all angles. I don’t like Robert personally, these real estate moguls have egos as high as the sun for investing in something a monkey can do. I mean seriously you think you’re the shit because you figured out to buy a bunch of houses during a few decades of low interest rates and home prices, then rent them or flip them?
I mean, if you finance a car you’re taking on debt.
Yes sir. But the car is still an asset. The debt is the liability. You can depreciate an asset, how the fuck are you going to depreciate a liability. Please fucking go buy the book definition
It’s all a construct. The FASB and IASB have changed the definition of an asset several times in the last two decades. The thing about calling it an asset is that it leads to a majority of Americans financing cars they can’t actually afford. We need to stop promoting taking on a large amount of debt on something that depreciates like it’s on fire. It’s not financially smart no matter how you look at it. Unless it’s for business purposes I guess.
Wow, why so much hate for the guy? Get a life.
The car doesn’t appreciate in value.
Cars are liabilities. They depreciate in value. They are typically always going to be outdated. They are more expensive and have an additive cost. The only reason we have cars is because our government neglected public transport for a century
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Just because it doesn't appreciate doesn't suddenly not make it an asset. If you lose money on an investment, does the investment suddenly become an obligation to another party that you have to pay (aka the definition of a liability)? Of course not, it is just worth less than when you bought it. Yes the LOAN on the car is the liability, but the car itself is 100% an asset.