The most important financial lesson(difference between assets and liabilities).

Many people are not rich because they don't know the most important financial lesson that is knowing the differences between assets and liabilities. There one more reason that makes people poor that is people think their liabilities is an asset but it is not true in real like a house, car, bike and many other things. 

You are thinking I have clear all my debt but you pay the insurance company, you pay for maintenance and other things. If you want to know "why your house is not an asset?" then, Click Here

Assets

The assets are those things that put money in your pocket. If it takes your money from pocket then, it is not an asset. If you buy a house and give it in rent. And at the end of the month, the house is putting money in your pocket then, it is an asset. It depends upon the cashflow which is assets or liabilities.

Liabilities

The liabilities are those things that take money from your pocket. House, Car, College loan, Mortgage are some example of liabilities. We can divided liabilities into two types that are current and  Non-current. 

Current liabilities are short term liabilities that are due and payable within one year. Non-current liabilities are long term liabilities that are due after one year or more.

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