If you are like the average family, you probably have 2.5 kids, a house, a car or two and maybe even a cottage. You are most likely both working and counting down the years till you can kiss your nine to fiver good bye. You may even have a company pension and contribute to the Canada Pension Plan as well. Living the life of Riley right?
However when it all comes down to it, you also have a mortgage, a car loan, credit card bills, probably a line of credit as well. You’re thinking that’s nothing, you have plenty of assets! You have your house, your car, your cottage, and your investments. Hold on there, you may be mistaken on what is an asset and what is not.
Let’s take a quick look, you have a nice house, but it is not your asset if you have a mortgage, it’s the bank’s. Same with your car and your cottage. You’re thinking that this can not be right, and if this is your definition of asset, then you may need to upgrade to the modern version.
Don’t get me wrong, I use to think like that too. It all changed when I heard this version from Robert Kiyosaki’s series “Rich Dad Poor Dad“. He says ” that an asset is something that makes you money”. Think about it, if you have a house with a mortgage, then it is the bank’s asset because you are making regular payments to them. Well you say that it is worth 250K and that you only owe 100K. If that other 150K in equity is not making you money then it is not an asset, unfortunately the same goes for your car(s), your cottage and possibly even your investments.
How can you change all of this? Put your self on the debt elimination fast track. If you owe someone else money then they are in control. Once this is done, see about using the money you once used to service your debts to invest in an area that produces you an income. Cut the chains to the bank and take back the reins to your life.
Please contact my office for a free no obligation debt analysis to see if that is the best solution for you. I was inspired by the actions of the CEO of Royal Bank of Canada Gordon Nixon in regards to his view toward rescuing Lehman Brothers in the States.