It’s the year 2025. It’s time to get your finances in order.

First, why should you care about getting your finances straight? It’s because money rules everything around us. You cannot get by in this world without having access to cold hard cash (or digital money in the current economy).

1. Let’s start with assets – what are assets?
   Put simply, an asset is anything that provides you money.
   
   Financially, assets are things or products or businesses that produce value or generate income. Most of you reading this don’t have any assets, you just have items in your proximity that you like to keep around.
   
   Your Car? Not really an asset, more of a depreciating liability. Home? Unless you’re renting out rooms or plan on selling it – your home is not an asset.
   
   A real asset is something like stock (ownership of a business), or your time (which you trade to your employer for money). Or a blog or social media presence, something you can leverage to sell stuff to others.
   
2. Next: What are Liabilities?
   A liability is anything that takes money out of your pocket.
   
   Remember 3 paragraphs ago when I said your car is a liability? It’s because it takes money out of your pocket. Tire changes, oil changes, the cost of gas necessary to fuel the vehicle. You’re ‘liable’ for all of those expenses.
   
   Similarly, a home takes semi-frequent repairs and guess what…You’re liable for those expenses as well. And last I checked, most people aren’t renting their home or their rooms out in order to make a profit. So, it’s a liability.
   
   Pets? Children? Gadgets and gizmos? Most of these are to some degree, a liability. That is to say they cost you money day to day. But that’s okay, it’s just the cost of doing business. Or the cost of living in most cases.
   
   Debt, is a huge liability. Taking out credit cards (that you can’t pay) and taking out loans (that you can’t afford) are both forms of debt. Debt that you are liable for – and the creditor is legally in their right to repossess the item you used debt to purchase.
   
   Built a little Venn Diagram to illustrate the point a bit further.

That’s it for today, as always… Michael, with Military.Cash

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