Do you want to build passive income and become financially free? A good way to do this is to invest in “cash producing assets.”
What are cash producing assets? They are the opposite of liabilities. Assets will put money in your pocket whereas liabilities will take money out of your pocket!
Your car is a liability; your dog is a liability; your home is a liability, however if you rent it out and the rent covers all outgoings it will become an asset!
Positive cash flow rental property is definitely a cash producing asset. Shares? These would be a cash producing asset if they were providing income.
In between assets and liabilities are “doodads!” Doodads are things like widescreen TVs, meals at restaurants, your yacht, or other things that are not totally necessary (though life would be quite boring without them)!
Our eight year old son, in his wisdom, has decided that fashion is a doodad! He is right…an excess of clothes could be classed as doodads. I had to point out to him that clothes themselves are very necessary otherwise we’d all be running around starkers! A trip to the nudist beach had him convinced!