I don’t know about you but I like material things. I like to wear nice stuff, drive a good car, live in a nice house, buy stuff for my wife and daughter, take vacations, etc. The issue is, these things all cost money and most people work to buy these things without paying themselves and having anything left over. One of my favorite books is Rich Dad Poor Dad because it shows the value of using assets to pay for liabilities. I’ve shifted my mindset over the years to this thought process. Now, when I look at something I want, I have to wonder how many assets it will take to pay for it.
Right now my wife is on me to get a pontoon boat for the family to use. There’s an old saying that goes the best two days of a boat owner’s life is the day they buy it and the day they sell it. It’s a giant hole of a liability, but it is a lot of of fun, especially here in Florida where you can use it 8-9 months out of the year. If I were to buy it today, it would cost us about $700 a month to buy it, insure it, dock it and fuel it every month. So now, I’ve got to figure out what assets I can acquire to get that done. Based upon what we buy and sell, it’s actually quite easy. I can buy two $5,000 properties and have it paid for. Let me show you an example of how this would work:
Purchase Price of Property: $5,000
Sale Price With Owner Financing: $35,000 Down Payment Collected: $2,500 Monthly Payment: $345 month
If I do that one more time with another property, I’ll be floating down the river and loving life. I’ll effectively have bought a boat for $5,000 as I’ve received 50% of my investment back as down payment from the buyer. This is how you use assets to pay for a liability. Now, I’m not quite ready to take this step, because right now I’m working on my income first. Remember, paying yourself first is the priority. I cannot deviate from that line because everything flows from that income. Once I’ve got freedom, I can start having all the fun I want in buying the toys I like.
If you’re interested in creating these types of assets for yourself, take a look at our inventory and let us know if you see something of interest.