Exactly @Gathige. Kiyosaki managed to form a few theories and the readers took them for facts. From an accounting point of view, your car can only be an asset in calculating networth. You will normlly credit your bank account/loan a/c if financed and debit your vehicle asset every time you buy a car. The thing is, your personal car is a depreciating asset and also 'eats' your money through running expenses. But from an accounting angle, it cannot be aliability as you can't buy liabilities!

Liquidity is also key...
Money has a time aspect to it..
if you needed money and its all or mostly tied up in assets.. such that its access in time of need is not as swift ( finding buyers.. closing transacction).. Then bado iko chida... millionaire you should be able to handle a few million transactions with ease

my 2 pence

@murchr, a car is an asset but a depreciating asset. Thus in doing your net worth math, you should only use its market value not purchase price. But it's an asset still, the expenses notwithstanding. The value it gives you by being able to travel from Runda to Ngong Rd without passing through town/avoiding stressing ma3 touts etc is an unquatifiable plus. BTW, land too has costs. Rent, rates and security for instance!

@murchr, let's look at value or utility that is generated by an item and not the monetary price in determining whether an item is an asset or liability. New social indicators like Happiness Index help cure what economics and accounting cannot measure. Eg You cannot put monetary value to what a stay home mom does but it's easy to quantify what a house help would do.

In the case of a car, if the user generates value from it on terms of generating income, social feel-good and improve on image it's a asset to that individual.

What about the Rolls Royce that was bought in 1937 for 610 bob and at Concours a buyer was offering 8m,what about an Isuzu lorry that was bought in 1971 for 13,000 and is now going for 1.2m?

Nope. Clothes are technically (depreciating) assets. The reason we don't include them in the balance sheet is that we expense them immediately when we buy them because they cost relatively too little to stagger. Bigger (depreciating) assets are expended over time through depreciation. If you are running a big hotel and you buy a huge amount of bedding, you'd probably put that in your asset column. If you buy two pillow cases with hares drawn on them because you think it will tickle your wife, you expense them immediately.

Disclaimer: I have never seen the inside of an accounting classroom.

I think this is Kyosaki's point too, if I read him right.

Everything that has a 'value' can be considered an asset. But, when it comes to building wealth, some assets take away more than they give back.

Interested in Land, do you have any contacts? Please email me on kymoney_1999@yahoo.com

Woyeee poor me... when shall i join the elite club of wazuwazi millis? Quite informative on how we value/view money! i learn something every day including that i could sell my kidney somewhere in mumbai and be an instant millionaire!

So would J. Orengo value his suit as an asset? We'll... to me yes when he decides to sell it for whatever amount the buyer will give, that's the value of that suit once out of the shop.
The bedding in a hotel can be classified as an asset...customers check in.

@mawinder, land and animals are assets...so yes there are millionaires in Turkana