I need to talk of Car
Car are Liability not an Asset
Please build an asset before thinking of getting the liability
One of the most common mistakes that vehicle buyers make is falsely identifying their car as an asset when in truth it is often a liability. While one could easily argue that vehicles are assets because they can put a decent amount of money back into your pocket once sold, on most occasions this is far from the truth.
What is an asset and what is a liability?
Most financial experts define an asset as an investment that passively puts money into your pocket without you having to work for it. It could be anything from stocks, to real estate, to businesses and everything in between. A liability, on the other hand, depletes your bank balance either regularly or seasonally.
If your vehicle is putting money in your pocket, for example, if you are an operator of a taxi cab, then it could be categorized as an asset, although it is not always as straightforward as that. However, if it does not contribute any positive cash flow then it could be considered a liability.
Hidden costs of owning a vehicle
The reason why a vehicle is not usually categorized as an asset, despite it being a liquefiable investment (when sold) is because of the hidden costs of owning it. These expenses include fuel costs, repair and maintenance, registration, sales tax, insurance and toll fees, just to name a few.
Need to stop here
Note – Please build an asset before thinking of buying a car