Good vs. Evil in Financial Life

Being broke is a terrible feeling, especially when you have family or employees who rely on you. Misfortune is often associated with being victims of fate and being born with bad luck. In many cases, the real cause is the wrong approach to money.

Yes, being poor or rich is not about income, but how you manage it. Your mindset can make or break your financial and mental well-being. Many people struggle financially because they don’t clearly distinguish what makes and what takes their money. Let’s break this down simply and see how a tiny shift can lead to financial freedom and even a healthier, happier life.

An Asset?

An asset in simpler terms puts money in your pocket, either through income, appreciation, or both.

Examples:

• Real estate – Rental properties generate monthly income while appreciating over time.

• Stocks & bonds – Investments that grow in value and may pay dividends or interest.

• Business ownership – Companies or side hustles that provide consistent cash flow.

• Intellectual property – Books, patents, or digital products that earn royalties.

A Liability?

A liability is an obligation that requires you to pay money, often over time. In short, it takes money out of your pocket.

Examples:

• Loans – Student loans or personal loans with interest payments.

• Mortgages – Though owning a home can be an asset, the mortgage itself is a liability until it’s paid off.

• Credit card debt – High-interest debt that drains financial resources.

• Car loans – Vehicles depreciate quickly, and loan payments reduce cash flow.
  

While not all liabilities are inherently bad, excessive or mismanaged debt can erode wealth.

But, can a Liability Be an Asset?

Yes – only if you change how you use it.

Example: A Car

Cars usually lose value and costs money. But if you use it for a delivery business or drive for a rideshare service, they now generates income.

Example: A House

A big house mortgage could eat up your income. But rent out part of it (Airbnb, roommates), and now it’s helping to pay its own bills.

It’s about perspective and creativity. Stop seeing liabilities as purely burdens. Instead, explore ways to leverage them for financial gain.

The Mindset Matters

Wise people focus on building. They think long-term. They ask, “Will this grow my wealth or drain it?”

Immature people often focus on consuming. They say, “I deserve this car, this house, these vacations.” – even if it means piling up debt.

Real-life extremes:

Athletes Who Lost It All

Make a simple Google search and you see this:

The list is endless... Even massive income can’t save you from poor financial habits.

On the flip side.

Value Investing Maniac

• Started with almost nothing, yet he managed to became a millionaire at age of 30.

• Bought his first stock when he was 11 years old.

• Has lived in the same Omaha house since 1958 that he originally bought for $31,500

You don’t have to be financial genius to follow the same principles:

1. Avoid unnecessary debt

2. Buy income-producing assets

3. Don't buy things you don't need

4. Turn the liability into an asset

5. Learn

Reward

By creating multiple income sources, you gain freedom from relying solely on a paycheck. You can easily fund lifestyle, emergencies, and even early retirement.

The Takeaway

This article isn’t about pinching every penny or denying yourself the things you’ve long desired. It’s about making thoughtful, healthy financial choices. If you take away just one thing, make it this. Before spending, pause and ask yourself:

Is it a financial burden or a blessing?