According to InvestorWords.com, and asset is defined as “any item of economic value…especially that which could be converted to cash.”  This essentially means that my house, vehicles, furniture, electronics, clothing, as well as stocks, bonds, cash value life insurance, gold, silver, investment real estate, etc are considered assets as long as I could sell them (EBay comes to mind) or somehow convert them into cash.  But Robert Kiyosaki defines an asset as anything that puts money into your pocket.

Conversely, he defines a liability as anything that takes money out of your pocket as opposed to the InvestorWords.com definition of “an obligation that legally binds [one] to settle a debt.

I much prefer Robert Kiyosaki’s definition because the essence of creating long term wealth is bringing in more cash than you spend.  We have all seen businesses go bankrupt despite having plenty of traditional assets because they didn’t have the cash flow to support those assets or their other business activities.  I also like this definition because the concept of financial freedom requires that your assets (or wealth) dispense enough cash to support your everyday expenses giving you the “freedom” to spend your time as you wish.