Assets, Necessities, Non-Necessities and Liabilities.

For those who have been following my blog will know that I have been buying assets and necessities since last September 2009. The reason for doing that is to get myself wealthier slowly. Well it is true that I am getting wealthier slowly and I will continue to do that so that one day I can achieve financial freedom. Remember that buying liabilities and non-necessities can only make one poorer. I will re-emphasize these four terms “Assets”,” Necessities”, “Non-Necessities” and” Liabilities” again in this post.

Assets:
These are the things that will help you to grow your money. For example, a house that will help you to collect rentals, interest from fixed deposit, dividends from shares etc.

Necessities:
These are the "needs" that you must have in order to survive. For example, food, water, shelter, education, clothes etc.

Non- Necessities:
These are the “wants” that you do not need to have but will not take away your money regularly. For example, buy an expensive home theatre system which you do not need and you pay in full amount without using instalment. Without using instalment, you will not be paying any interest for the things you have bought.

Liabilities:
These are the “wants” that you do not need to have and will take away your money regularly. For example, buy an expensive home theatre system which you do not need and you pay by instalment. By using instalment, you are likely to pay more for the things you have bought due to interest incurred.