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I previously mentioned how liabilities are money sinks you should avoid. However, one of the many skills of an entrepreneur is to make their money is by turning liabilities into assets.
This may sound like a silly concept because most liabilities require repairs, ergo money to maintain. If you can make money off of the liability in which beats the expenses it becomes an asset.
Turning Automobiles Into Assets
One of the most criticized liabilities I ever mentioned are cars. Most cars are liabilities. However, Americans frequently use them as a side hustle in America. This is thanks to ride share programs like Uber or Lyft. People complain about these programs especially since MIT published that some people do not make more than minimum wage or that they even lose money. However, the people behind the research admitted the math was off and a new study shows that the median gain is $8.55 to $10.00/hour. However, 6% of drivers still lose money after paying for insurance, fuel, and maintenance.
Unfortunately, even in a world where side hustles and independent contracts are easy, it is still possible to lose money. Still most people can make money off their automobiles and could turn them into assets.
Most Consumer Goods Could Be Turned Into Assets
If vehicles can be turned into assets, so can most other consumer goods. Restaurants could use almost every kitchen utensil. For example, the missus and I have a Kitchen Aid mixer. This is hands down on of the best mixers to have. I am fairly strict with money, but I 100% agree with her that if we need a replacement, we will buy one. She bakes incredibly delicious baked goods with it. I even recommend that she should start a baking business as she has some skills of an entrepreneur. If she does, that liability (which is worth it anyways) can turn into an asset (not to mention sometimes a tax-write off).
If it is hard to wrap your mind around the concept of how easy it is to change a liability into an asset ask yourself this. Where would you be money wise without a computer? Even if you have never made a dime selling something digitally or started a business, how many of your jobs would you complete without a computer. Considering a study in 2014 states that more than 50% of jobs require some skills in technology, I would say not many. I know I wouldn’t, molecular modelling, programming, statistical analysis, not to mention just writing and publishing my reports all require a computer.
I know computers can be very expensive, there are plenty that extend to over a thousand. There are easy ways to save though. My personal go to is to buy certified refurbished.
The computer I use is a Dell Latitude E6430, with an intel Core i7 processor. These computers are among the top of the line for professionals. From my work I would have to manipulate images and simulations which can take up gigabytes of data all at once. On my old computer, it froze frequently, on this it never does. People are scared of certified refurbished products. Note, I never bought a certified refurbished that lasted less than five years (granted I am only on my third). Amazon is one of the go to websites for getting refurbished computers. Getting a great computer for only a few hundred dollars makes it one of the easiest liabilities to turn into an asset and a central tool for skills of an entrepreneur.
You do not even need to make a business to turn your consumer goods into liabilities or even use them. With the development of rental services like Airbnb, there are many rental services out there. You can use Zilok to rent out just about anything. This goes from ladders to vacation rentals.
One of the best used and reviewed rental services includes RVShare. This is a new business in which allows peer-to-peer renting of RVs ranging from towing RVs to motorhomes. It is the Airbnb for RVs. Renters can rent RVs for as little as $100/day (compare to hotel and travel combined).
If you have read Rich Dad, Poor Dad you should know that the wealthy do not buy liabilities, they buy assets. That does not mean that they only bought stocks, property, etc. They bought with the purpose to make money. With the internet, the most powerful tool humanity ever knew, turning liabilities into assets has never been easier. Remember assets put money into your pocket, if it does not, at least at the moment, it is a liability. Actions make assets, not intentions. Take action with what you purchase to forge your wealth from the very things that normally destroy wealth.