aving his customers pay for the fuel, insurance and tax for a few years he pockets the profits he's made and trades in the car for a bigger one. Any expenses he incurs are tax deductible. He then repeats the process with his bigger, smarter car and in a few years time is able to buy two cars, then three...

Ten years down the line the first man has made a

Many of us believe that the harder we work the more money we'll earn. This isn't true. In fact within reason the opposite is true.

Let me give you an example. It's a fact that it's the poorest people in this world who work the hardest. Try working in a factory for 7 days a week at just a few cents an hour and you'll soon realise this.

Take a look at any rich person you know or know of. How hard do they really work? Probably not very hard. If they do work hard it's often because they enjoy it.

The fundamental difference between the rich and the poor is that the poor work hard for very little money but the rich have money work for them.

The rich have assets which earn them more money while the poor have liabilities which cost them money.

To be a successful entrepreneur you must learn to obtain assets and build systems which will earn money for you, not buy liabilities which will cost you money in the long term.

An example I often use is the following: two men buy an expensive car from the same garage at the same price.

The first man drives it around for a few years and after paying out thousands of dollars in fuel, insurance and tax he finally sells it on (as he can no longer afford to run it) at a loss of another 20 thousand dollars. I personally know people who do this continuously.

The second man hires out the car to people for special occasions such as weddings and parties. After having his customers pay for the fuel, insurance and tax for a few years he pockets the profits he's made and trades in the car for a bigger one. Any expenses he incurs are tax deductible. He then repeats the process with his bigger, smarter car and in a few years time is able to buy two cars, then three...

Ten years down the line the first man has made a s

or have liabilities which cost them money.

To be a successful entrepreneur you must learn to obtain assets and build systems which will earn money for you, not buy liabilities which will cost you money in the long term.

An example I often use is the following: two men buy an expensive car from the same garage at the same price.

The first man drives it around for a few years and after paying out thousands of dollars in fuel, insurance and tax he finally sells it on (as he can no longer afford to run it) at a loss of another 20 thousand dollars. I personally know people who do this continuously.

The second man hires out the car to people for special occasions such as weddings and parties. After having his customers pay for the fuel, insurance and tax for a few years he pockets the profits he's made and trades in the car for a bigger one. Any expenses he incurs are tax deductible. He then repeats the process with his bigger, smarter car and in a few years time is able to buy two cars, then three...

Ten years down the line the first man has made a

rives it around for a few years and after paying out thousands of dollars in fuel, insurance and tax he finally sells it on (as he can no longer afford to run it) at a loss of another 20 thousand dollars. I personally know people who do this continuously.

The second man hires out the car to people for special occasions such as weddings and parties. After having his customers pay for the fuel, insurance and tax for a few years he pockets the profits he's made and trades in the car for a bigger one. Any expenses he incurs are tax deductible. He then repeats the process with his bigger, smarter car and in a few years time is able to buy two cars, then three...

Ten years down the line the first man has made a

aving his customers pay for the fuel, insurance and tax for a few years he pockets the profits he's made and trades in the car for a bigger one. Any expenses he incurs are tax deductible. He then repeats the process with his bigger, smarter car and in a few years time is able to buy two cars, then three...

Ten years down the line the first man has made a substantial loss and is back riding his push bike to work. The second man now has a fleet of posh cars which he hires out for a living and has quit his day job as a result.

So, if these two men both started off buying the same car at the same price, what went wrong for the first man and what went right for the second man?

It's simple, the first man turned his car into a liability as many of us do. The second man immediately turned it into an asset.

Next time you buy anything of any value just remember this example and establish whether you're really buying an asset or a liability. Try to be the second man wherever possible and you'll be one large step ahead of your friends and associates who haven't been fortunate enough to read this article.

For more entrepreneurial tips and advice please visit: http://www.entrepreneur-mindset.com

Best Regards,
Jason King BSc MBCS CITP http://www.entrepreneur-mindset.com