eli5 what’s the difference between an asset and a liability ?

Question

Couldn’t get it while reading Rich dad Poor dad book

In: 1

Answer 1

Read the whole book and couldn’t figure it out?

An asset is something with value that’s either worth money or generates money for you.

A liability is something that **costs** you money.

Having a paid-off car is an asset because you can sell it and put X dollars in your pocket. Having a financed car is a liability because you need to pay money every month to keep it.