One of the most important lessons I ever learned about money came down to one word: ASSETS. By definition, an asset is a useful or valuable thing, person, or quality. But I didn’t truly understand that until a trip to the mall with a friend I used to call “cheap.” While I was busy loading up on the latest sneakers, he was just window shopping.
I asked him, “Man, you aren’t going to grab anything?”
He looked at my shoes and then back at me. “Those shoes aren’t an asset or a need,” he said. “The ones on my feet work just fine.”
I laughed it off, thinking he was just being tight with his cash. As I walked out with my bags, I told him, “Brother, you have to treat yourself one of these days.”
He looked at my bags and asked, “What do you call those?”
“New heat,” I replied.
“I call them liabilities,” he said.
I went home that day and looked up the actual difference between an asset and a liability. It hit me like a ton of bricks: He was right.
What Counts as an Asset?
Since that day, I ask myself one question before I tap my card: Is this an asset? The answer depends on your “field.” An asset is anything that puts money into your pocket.
- The Bar Owner: Your staff, the furniture, the kitchen equipment, and even that mechanical bull or pool table are assets because they draw people in and generate revenue.
- The Driver: If you’re pushing an Uber, that car is an asset.
- The Creator: If you have a YouTube channel or a recording studio, that equipment is an asset because it produces content that makes money.
- The Developer: For me, it’s the land at Community Steps Estates or the digital products in my WooCommerce store.
The Three Pillars of an Asset
If you’re still confused about whether you’re buying a “toy” or a “tool,” check it against these three properties:
- Ownership: Do you own it, or does it own you?
- Economic Value: Can it be sold or traded for value?
- Resource: Can it be used to generate future income?
If it checks those three boxes, you’re looking at an asset. (And by the way, my favorite asset? Cash. It’s the ultimate resource because it’s the liquid fuel for every other project.)
The Balance
You want to stack as many assets as possible. Does that mean you can never buy a nice pair of shoes? No. In the words of Mr. Benny: “Treat yourself, because won’t nobody treat you like you treat yourself.” The key is to make sure your assets are paying for your liabilities. Once your business or your investments are throwing off enough cash, go ahead and get those shoes—just make sure the “gasoline” is already in the tank.
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