Are you really aware of an asset meaning?

Whether you are a numbers person or not, finances become a major part of your life as you continue to propel into adulthood. As you are consistently reminded of the importance of investments, it is also imperative to understand the difference between an asset and a liability, especially if you are making purchases with the intent to create value.

So, what is the definition and meaning of an asset?

According to, an asset is “a single item of ownership having exchange value.” also defines it as “property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies.”

Of course, other definitions include a balance sheet for liabilities and capital as well as generalized to anything that is useful or valuable.

Robert Kiyosaki, American businessman, investor and self-help author, puts the description of the meaning of an asset a little more simply:

Asset Meaning

His examples include real estate, businesses that don’t require you to work at them, and stocks and bonds as mentioned in his book, “Rich Dad, Poor Dad.”

However, certain items you own can also be considered an asset, even within your own home.

Conversely, these same articles could be liabilities. Liabilities, as defined by are “moneys owed; debts or pecuniary obligations.” Kiyosaki explains them as any purchase that takes money out of your pocket.

As you dive into the world of researching which of your household items put money in your pocket and which are a straight cost, you’ll need to keep these definitions in mind. A major issue is that many people believe their goods are profitable when, in reality, they are not as valuable as they think or, worse, they are a bit of a disadvantage to the consumer’s pocket.

While this can be an often confusing topic, Suburban Finance is here to help clear things up. Below are common possessions that you may not have realized were assets (or liabilities):

  • Your carSome will actually deem your vehicle a more of a liability due to the amount of expenses that go into them over time. These include gas, maintenance, insurance and a loan. A car can surely be an asset, though, if the value is greater than the amount due on it. It is also classified in such terms as it can be sold for cash; however, it continuously devalues over time, not excluding the minute you drive it off the lot. While you can add your automobile to your overall net worth, you have to also deduct the liabilities on it when doing so along with determining the depreciating value. (Equally, include all liabilities in your total net worth calculation.) Many dispute on this topic, but you need to be able to establish the worth of the vehicle (trade-in value, what you gain over time, etc.) and the expenses you will accrue.
  • Fine art. Art and other collectibles, such as antiques, can add a considerable amount to your net worth. Of course, this type of purchase does not come without research. The rarer a piece, the more valuable; but the art industry is also very erratic. This is not an easy money-maker, even though its value can be limitless. This can be also be an initial expensive investment on top of an ongoing venture, since purchasing the original will be worth more than a reproduction. If you already have some items that you believe to have value, whether a reproduction or not, you should invest to have them appraised. This will be the best way to ensure you have a strong asset in your hands. Furthermore, you should be aware of the fact that home owner’s insurance may not cover your collectibles without special coverage.
  • Furnishings and appliances. Furniture, appliances and even clothes are considered what is known as non-earning or non-financial assets. These are items you own but do not provide extra revenue. One could say that appliances could also be considered an earning asset due to their efficiency in saving you time, which creates more opportunities for you to make money. If you are purchasing certain goods with the intention of investing, such as antique furniture or collectible items, you will (as mentioned above) want to consider getting them evaluated for value. While most household goods won’t necessarily produce more income, they do still represent part of your net worth. They are also useful for cases of bankruptcy and replacement cost in your insurance policy.
  • Guns. Firearm purchases have been on the rise, particularly with the gun-control laws. These purchases include both collectibles and commercial. Many investors are anticipating tighter regulations in the near future while others are concerned of the return of the federal assault weapons ban, which means any firearms in the banned categories will be illegal to produce. Those in circulation will, though, still be able to purchased and exchange hands with a fixed supply level. These commodities are very valuable to each owner, and they tend to appreciate over time. Guns are an investment that has a price dependent upon supply and demand. While still a strong subject, guns are, indeed, considered an asset due to their steady worth. As with any asset, they would also need to be disclosed if ever filing bankruptcy.
  • Your homeWhile common thought is that your home would be measured as an asset, Kiyosaki actually considers this to be more a liability due to the time and expenses spent on maintenance, mortgage payments, insurance, the home’s devaluation and the like. It’s likely that you may not sell the home for what it is worth due to still owning on the loan when you move. Renting a room, though, can help to turn this non-earning asset into a financial gain. Also, purchasing homes with the intent to rent to others would also turn home-buying into an asset. This is, of course, depending on who you ask. In the business world, homes are typically considered more of a liability due to costs in time and money. In spite of this, most homeowners will think of their house as a strong resource due to owning the property.

In summary, what is considered an asset and liability is often debated and dependent upon whom you ask. Just remember to keep in mind financial trends and potential value in items before attempting to turn household products into money in your pocket.

4 Insanely Simple Ways to Make Passive Income in 2015

ideas for passive incomeThis post is an updated version of the 2014 version about passive income ideas.

You know it’s possible to make passive income.

And you want to start making more of it.

But you don’t know where to start. There is so much information out there, and it’s all a bit confusing.

But 2015 is the year that you are committed to conquering the passive income itch.

And I’ll help you make that happen.

In this post, I’m going to show you how I make more than $900/month in passive income.

There are many ways to make passive income, but coming up with passive income ideas can be difficult for one reason: mental blocks.

Mental blocks may include lack of knowledge, the idea that the topic seems complicated, and risk adversity.

In reality, you just need to take the plunge.

Here are a few ways that I make passive income, as well as some popular methods that others use.

Passive Income Idea #1: Peer to Peer Lending

Is Peer-to-peer lending still controversial?

I can’t imagine how – it’s simply lending money to a peer (or an individual/group of individuals) instead of a bank or credit union.

The ethics of banks are questionable to begin with, so many people want to get funding from a peer instead.

For you, this is an amazing opportunity to make passive income.

The main income model from a bank is lending. Whether that’s through credit cards, business loans, or personal loans, they cash in.

And you can, too.

One of the only legitimate ways to do this is to sign up for a P2P (peer-to-peer) lending plaform.

The most popular lending platform is which will connect you as a lender to borrowers, and as a borrower to lenders, and make it all possible.

The link to Prosper is an affiliate link and if you decide to do P2P lending with my affiliate link, it will give me a small kick-back – which I will use to buy ice cream (ha.. ha..)

Passive Income Idea #2: Investing

Okay, I know you’ve heard of investing.

But if you still haven’t taken the plunge into the investing world, you are missing out.

And so many people are scared of this income generating machine.

But you shouldn’t be!

Tell me: how is it normal that we “invest” $50,000 in a 4 year degree for a career we aren’t sure we’ll love, yet shut down at the thought of investing $1,000 in an ETF and turning that into a compound interest generating machine?

If you do your research and invest intellegently, you can make a substantial amount of money in interest.

Historically, the average return when it comes to investing is around 9-10%, which is 9-10% return – absolutely passively.

Just START. Stop procrastinating. Read a book on investing, and then stop making excuses.

Open an account with eToro – this is the coolest platform becuase you can actually look up other Traders on eToro, see their returns and copy their portfolios with their OpenBook feature.

Then, start by investing $100.

Passive Income Idea #3: Monetizing a Blog

Blogging is, in and of itself, not passive. You have to write articles, comment on other posts, format, learn search engine optimization, have a presence on social media, etc.

Even so, if you are a hobby blogger and are already blogging, you can monetize your blog by adding Google Adsense or affiliate marketing.

I’m not a huge believer in ads by any stretch of the imagination, but I make some decent money by recommending products that I actually stand behind.

And if you want it to be truly passive, hire a team of writers and/or virtual assistants and let it generate money.

Passive Income Idea #4: Become a Landlord

This is definitely not 100% passive, but inreality, nothing really is.

As a landlord, you are at the beck and call of broken appliances, rowdy tenants and the whims of the market. Unless, of course, you are smarter than that (but who can really vet their tenants that well?)

Renting a room out in your house is the most passive, or convert a floor or separate building on your property into a suite.


See, it’s not that hard to make passive income. You just have to DO something.

Subscribe to the newsletter and get more ideas on how to make passive income!

Top Advice From Entrepreneurs Who Made It

It turns out that entrepreneurs may not be such a rare breed as we typically think. Following a study by Lloyds Bank Insurance, it has been found that a total of 51% of employees would like to start their own business, to seize control over their work/life balance.

As reported by Champion Accountants, the top recurrent reasons people gave as to why they would like to be an entrepreneur were:

  • 46% want to take on new challenges
  • 41% cited financial reasons
  • 83% said they would be more motivated to work if they owned the business
  • 79% said they would have greater job satisfaction
  • 78% said becoming an entrepreneur would be more stressful

The interesting factor in this data being the relatively low importance people placed on financial benefits, in favour of the greater sense of satisfaction they would gain from self-employment. This is, however, counterbalanced by the low percentage of people who would like a new challenge, which could be seen as the dividing line between entrepreneurs and the rest of us.

We’ve therefore gone ahead and gathered top tips from leading entrepreneurs to advise and motivate those would-be start ups.

Keep Fighting Failure

“Failure does not mean stop, it’s simply a u-turn to keep going.”Lisa Williams – Founder & CEO, World Of EPI, 2013 EY Winning Women. Source.

Failure shouldn’t be seen as the be all and end of your aspirations; failure is a minor roadblock or indication that something isn’t quite right. Everyone who succeeds has failed 100 times before that. The difference is that they learn, develop and adapt to failure, which ultimately turns it into something hugely beneficial.

Find Your Jedi Master

“Surround yourself with great mentors. They help when you reach a plateau in your business cycle and can shave years off your business development and growth through advising from their mistakes and successes.” – Thalej Vasishta – Founder and Managing Director of Paragon Law. Source.

As we’ve covered, everyone has to overcome their own failures but there’s also no harm with finding someone with more experience than yourself and learning from theirs! Who inspires you? Who do you aspire to be? Drop them an e-mail and try to build a dialogue.

The Power of The Humble List

“I have an A4 page a day diary, which is essentially a rolling list of things I am doing in the next 24 hours.” – Patrick Dudley-Williams – Founder of Reef Knots. Source.

The pen is mightier than the kanban board. Never forget that and never underestimate how much easier you can make your day by carrying a notepad and pen around with you to jot down and prioritise everything you need to do. No one can remember everything and this is a simple method for making sure you do.

Risk Taking Is Scary…Or Is It?

“You don’t have to be fearless to make dramatic changes in your life. Transformative change isn’t propelled by raw courage. It’s “sparked” by a series of events that build exposure and experience, both of which help to create asymmetric risk. Through sparking, the upside opportunity is confirmed while downside risk is mitigated. Ultimately, the leap—when it comes—is not one of faith but of experience, even of comfort” – Tim Ferriss – Author of The 4-Hour Work Week. Source.

Risk taking is often romanticised as fearless guess work that somehow culminated in fantastic success. Not so. The best risks are well calculated culminations of the individuals total experience – not a blind shot in the dark.

Build a Great Idea, Then Build An Even Better Team

“A good idea is not enough. Business aren’t just about ideas, businesses are about execution. Don’t get too enamored with your own idea. Other people are going to have that same idea or something similar. You have to build a better team to execute it. You’re only human, nobody has all the skills required to make a business work. [Ask yourself] what people are required to make it work for this idea, for this business?” – Brian Sharples – Co-Founder of Brian Sharples.

Need I say more? If you think you’re on to something great, then gather the talent you need around you and get it built.