Something actually happened to me lately….something bad. My PlayStation Portable (PSP) which was bought less than a year ago at around RM 1000 (around USD 300-400 ?), was pronounced dead by the second doctor. I was feeling very sad (er…maybe i should use “I am feeling very sad”).

There’s something within me that shouts the line “Alvin, go ahead and buy another PSP for goodness sake. It’s only RM 700 now!” And I seriously mean it, I do have that urge to drive to the shop and purchase another PSP…especially with all the nice games coming up.

If this happened 6 months ago…..I would’ve bought myself another PSP…around RM 700 (total cost of owning a WORKING PSP will then be around RM 1700). But now…something within me, is telling me not to buy another PSP. Why?

Because it’s a liability.

A lot of things around us can be considered liabilities. Branded clothings, bags, shoes, luxury watches, video games, LCD TV….I’m sure you know better than me. True, some of you might argue with me (or with yourselves) that the NICE thing that you’re planning to buy (such as Nintendo WII) is NOT a liability. Well, let me ask you this question “How sure are you?

Asset is something that you should buy, if you want to be in control of your finances. Assets can earn more money for you. These are the things which will make you rich. These are the things which will make money work for you. Example? Shares, bonds, etc….of course…the right ones. 🙂

Liabilities, on the other hand, are mostly our desires. The “nice-to-haves” such as …well, i just listed some of them down.  These are the things that will make you spend money….but there will not be much (if any) returns of investment.

One of my best buddies told me he plans to buy a new PC…cool. I asked him one question “Do you think it’s a liability or an asset?” He said…”It’s an asset“, and I asked “Can it make money for you?” and he said “Of course! I can start an e-business using it!“. Pretty relevant. You can indeed start an online business using your PC………but…….i pushed on with my last question “How sure are you that your main purpose is to start an e-business using this PC?“…and he went silent.

If you are pretty sure the “liability” you are buying can earn you some $$…then please, go ahead and prove to yourselves (not to anyone else). Most of us thought that these liabilities that we are planning to buy, will end up bringing some $$ to us….but most of the time, this “dream” of ours will not materialise.

So, the next time you are planning to buy something….think about this. 🙂

p/s…of course, it helps to reward yourselves from time to time with nice-to-haves. Don’t be so stingy to yourselves. 🙂 But please don’t overdo it especially if you have big dreams. For me…I don’t think I’ll get another PSP just yet. 😉 …..even though I seriously want 1. LOL.  

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