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To thrive in 2019, dare to think outside ‘the box’ and perhaps re-evaluate some aspects of conventional wisdom...

I love the start of each New Year; a crisp anticipation wafts through the air and often inspires us to grow. If that applies to you, then I'm sure your key goals and New Year resolutions extend across several dimensions of life. In the economic or financial dimension, may I suggest you take time to list, estimate the value of, and analyse all your assets?

You see, your assets hold the key to your long-term financial health, and as financial guru Robert T. Kiyosaki advises: “Don’t buy luxuries until you’ve built the assets to afford them.”

For most people, such thinking is alien. If we receive some cash as a gift or from our work, we spend it all on our must-haves and would-like-to-haves. That’s why we will always toil for money.

In contrast, those who are wired to grow rich, or richer, intuitively understand the wisdom of Kiyosaki’s lesson: We should not go overboard buying fancy stuff until we’ve built up the appropriate productive assets that spin off passive income that pays for – and thus allows us to one day easily afford – the luxuries we want!


If that slower, safer, saner approach appeals to you, here’s how to reengineer your financial habits:

1. Stop thinking about the active income you earn through hard work and sweat as being solely for living expenses.

2. Channel some of your active income to ‘buy’ savings and investments that generate passive income like interest, rental, dividends, and distributions from, respectively, bank savings, investment real estate, high quality stocks, and unit trusts.

3. Throughout your future decades of asset accumulation, focus on building your personal asset base.

4. As you accumulate assets, take time to regularly analyse the composition of the assets you currently own. Those who fail financially either don’t buy any assets or buy too many of the wrong sorts of assets and too few of the right types of assets. Those, like you, who hunger to succeed financially will, instead, exercise delayed gratification that allows them to defer expenditure on baubles today so they may instead accumulate a vast array of productive assets.

So how should you analyse the composition of your assets? Here are three guidelines:

1. Do so regularly, say once every three or six months;

2. When you’re uncertain about the exact current valuation of any of your assets, each of which should be a separate line item on your assets list, err on the side of caution and write down a low-ball figure so you don’t delude yourself as to how wealthy you truly are.

3. For each asset line item, ask yourself two questions:

a) Is this a depreciating asset or a potentially appreciating one?

b) Does this asset throw off passive income that I may fully reinvest during my working years, and which I may safely spend during retirement?


In the midst of all this personal financial reengineering, adopt some fruitful out-of-the-box thinking. To get you started, I’ll leave you with three such ideas, the first from Kiyosaki and the second and third from me:

1.Kiyosaki upset accountants around the world when he taught, in his bestselling book ‘Rich Dad, Poor Dad’, that: “Your house is not an asset.” Obviously, from an accounting perspective the house we call our home IS an asset because it sits in the asset column of our net worth statement. But Kiyosaki doesn’t just consider anything and everything we own a true asset. He has a more rigorous definition of an asset and a liability. In his own words: “An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket.” That simple idea has benefited me and my best financial planning clients. If you have the right frame of mind, it can help you, too.

2.Work toward skewing the composition of your assets list toward productive assets so that the home you live in (as opposed to the other pieces of investment real estate you might own and rent out) is no more than 15 per cent of your total gross assets value.

3.Similarly, the total current market value of your car (or cars) should not exceed more than 5 per cent of your total gross assets value.

Chances are high that if you do this analysis now you'll find your home and vehicles carry much higher weightings than my suggested guidelines. No problem!

Simply focus on accumulating productive savings and investments and delay upgrading your home and cars. (I will turn 55, God willing, in May this year, yet my wife and I still live in the same home we bought the year we got married, 1998, during the Asian Financial Crisis! I also still own the very first car I ever bought, a third-hand Proton Saga. You probably shouldn’t be as extreme as I am but I hope these guidelines help boost your ownership of productive assets throughout the rest of your life.)

Next week we’ll consider how to slash your liabilities after analysing their composition. May this start of 2019 be a phenomenal time of personal reinvention for you.

© 2019 Rajen Devadason

Rajen Devadason, CFP, is a Licensed Financial Planner, professional speaker and author. Read his free articles at; he may be connected with on LinkedIn at, or via You may follow him on Twitter @RajenDevadason

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