Living in a world of instant gratification, it is difficult to think long-term regarding goals. In this era, everything must come easy and it must come fast. This way of living can be a form of insanity. In fact, living this way can be dangerous financially. Spending money on things that bring a quick shot of dopamine can be a surefire way of blowing your money.
Now, I’m not saying do not enjoy the fruits of your labor, but it does beg the question of, “How much fruit does your labor produce?”. If it produces a lot, then there is some wiggle room. However, if it does not, then you might want to enjoy within your means. Overall, it is about finding your balance. How do I balance my assets and liabilities?
This is a questions most people subconsciously think about when they purchase something that they want while convincing themselves that they need it. This is the battle between assets and liabilities. Now, before we go deeper in the how to think long-term regarding liabilities and assets, we must define what they are.
Liabilities
Oxford Languages tells us that a liability is a person, place, or thing that whose presence or behavior causes a disadvantage to one’s benefit. This means that the risks of losing is higher that the opportunity of earning a reward. For example, you purchase a vehicle and you drive it off of the lot. The moment you do, that vehicle is no longer worth the amount that you’ve paid for it. The vehicle is in a depreciating state, meaning it is losing value per every mile you’re driving it. There is no monetary gain.
Assets
Regarding assets, Oxford Languages defines this as a useful or valuable person, quality, or thing. This is tricky because everyone tries to justify every purchase as a asset, even though everyone can truly verify it is a liability. An example of an asset is an investment. It’s purpose is to add value instead of creating the latter.
It’s Not Always About Money
Now that we understand the purpose and difference between assets and liabilities, let’s talk about what can be assets and liabilities. Most of the time we label the two entities as solely monetary. On the contrary, money is the bulk of what the two actually correlate to. But what about other nouns that can be labeled as assets or liabilities? Let’s talk about it.
People
When it comes to assets and liabilities, depending on your goals people can either be a make or break for your growth. If the people that are closest to you aren’t supporting your growth or progression on any level, that makes them a liability. For the ones that choose to invest time and energy into your grown are assets. These are the ones you will need to keep around.
Places
You are a product of your environment. This can either be a good or a bad thing. The choice is yours really. Finding a place that is most conducive for you to focus on your craft will be an asset, however finding the latter will hinder the creative process. For example, I can image a yoga studio existing on top of a day club that has frequent rave sessions. It would be quite hard to complete a session with loud music rocking the studio.
Things
Things are arguably the most distractive between the three subcategories. It is very difficult to live without things that we are drawn to. Whether or not we need certain things, we will justify a reason why we must have them. Because we require so many different things to get through the day, it is very difficult to just have the necessities. We must have more, better, and stylish things.
The problem with things are that they can be a huge distraction from your growth. For instance, you may need a specific camera to film for your new channel. However, the problem comes when you desire a new pair shoes that you’ve been eyeing for the past few weeks. So you buy the shoes which are way more than the camera you need to further your business. That is a problem.
Protecting Your Assets
When it comes to investing, we all hope to gain from our investments. Of course sometimes we end up with bad investments but we assume those risks when we invest. The key thing is for your assets is protecting them. How do you do such a thing? Simply by prioritizing your growth. Before you decide to indulge in a liability, think about how does this affect your assets. If it hinders your asset, refrain and refocus on the assets.
If you are serious about your growth, you must prioritize your assets. Remember, liabilities are negative to individuals who desire growth. Yes, liabilities are essential to life’s enjoyment but if there isn’t self-control then the risk to reward ratio will always be low.
Bottom Line
Be honest with yourself and your goals. So people, places, and things are not always necessarily aligned with your plan. On the flip side, there will be people, places, and things that are what you need to advance your plan. Being honest with yourself will keep you aligned with what will be most effective.
Protecting yourself is protecting the dream. Understanding what is an asset and a liability will help with minimizing mistakes and maximizing results. However, please understand that living is a part of the process. There will be time where you just need that confidence boost. Some liabilities will provide you that confidence. The main idea is to keep yourself honest about what it is you’re wanting to achieve. Lastly, go for it! Nothing works unless you do!
