Your Biggest Asset...and Liability

What is your biggest asset? In accounting, you'd probably list your home, car, boat, etc. But many fail to realize that there is a financial freedom resource that is more important than any of those things. It's the one resource that can make you millions and at the same time cost you millions.

You

You are your biggest asset. You are also your biggest liability. Whichever you choose to be is reflected in your finances. If you notice that your bank account has more money flowing out than in, you're probably a liability. But don't lose hope because there are ways to transform yourself into being your greatest resource.

When it comes to finances, there is one thing that is important to your wealth.

Financial Education

In regards to investing, many people fail to invest in themselves. Some don't want to bother reading, studying, and going to seminars. They feel it's a waste of time, energy, and money. We feel that focusing on the resource between your ears actually saves you those things.

Put in time towards growing your knowledge on money. As with health, you can't depend on anyone to workout for you, lose your weight, and chew your food. The more you know, the healthier you can be. Many individuals give their money to their brokers and planners without fully knowing what's is happening. Understand where your money is going and what it is doing.

I fell into this liability category early. When I was enrolling into my 401k retirement plan offered by my first employer, I asked my wife's friend to help me choose where to put my money. (And by "help" I mean she pointed, and I wrote.) I believe it took a total of 30 minutes. I even thought that was too long. I've spent more time shopping for tools than planning my financial future.

I put no effort into researching a financial decision that could have lost me a ton of money. After investing in our financial literacy, my wife and I decided to take the money out of my 401k and close that account.

Although expanding your financial literacy takes a lot of learning, there is also some "unlearning" that is involved. Holding onto old ideas can keep you on the liability side. If what most people are doing is correct, then most people would be in a good financial position. However, we know that in recent years the average savings rate is negative.

What you don't know can cost you. And if you're not considered "sophisticated" according to your financial education, then the deals that are available to you will be limited. These lost opportunity costs equate to money lost forever.

Special Treatment

If you are convinced that your mind can be an asset, the next step is to treat it as such:

• Grow it - It's an ongoing process. My wife and I have made many decisions that we would love to take back. But stumbling here and there is part of the process. Your experiences, whether good or bad, can help you when making future decisions.
• Insure it - You protect your assets, like your house and car, from loss of production right? Well, if you're a wealth generating resource, protect yourself as well. The great thing about this is that once this is properly done, you are able to utilize your assets more and grow them at a greater speed than ever before.
• Share it - This is the most important law of money: "Give and you shall receive." Giving plants the seed that provides the fruits that others can enjoy. When others plant the seed, you will enjoy their fruits in return. Share your knowledge. Share your wealth.

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You are in the driver seat. You're the one that spends, saves, and/or invests your money. Where you are today is a result of your choices. You can either blame the backseat drivers or start taking control of the wheel.

Whether it's your health or wealth, you can either be an asset or a liability. You choose. Are you going to sit on your biggest asset or use it?