Introduction

Building wealth is a process that has recently become possible for anyone that can save $30 a month. There are a couple of essential concepts to building wealth that you must understand. The first concept involves defining wealth as your ratio of assets to liabilities. The second concept involves generating significant unearned income. 

Let's discuss the first concept, assets and liabilities. Hey wait a minute, I thought this was a wealth building course not an accounting class. Don't worry. This little accounting primer will be painless. First, we must define exactly what assets and liabilities are.

Assets: are items that you own that have a cash value (bike, blood, gametes, car, etc...)

Liabilities: are items you must repay (debt). Credit cards, home loans, and car loans are liabilities. 

From a financial point of view, you become wealthy when you own more assets than liabilities. Now you can impress your friends and family members with a few accounting terms.