Top 10 Assets That Are Making People Rich
Top 10 Assets That Are Making People Rich
Assets are something which make people rich by doing the least amount of work everyday. It basically acts like a medium in order to earn money. In this article we will discuss the top 10 assets which are making people rich.
1. Cash :
Cash is one of the most common assets with people. Cash also works as an asset when you save it in your bank and the bank pays you interest on it which keeps on growing your wealth. Although the interest paid by the bank cannot keep up with the inflation but still cash works like an asset.
Why Rich People Keep Cash In Reserves : Rich people keep a large portion of their wealth into reserves or savings for two major reasons.
1. To buy anything as quick as possible : If you don't have some amount of your wealth in liquidity you will miss many opportunities to buy things like property, Jewellery , and many more because their prices fluctuate in weeks and in order to liquid some part of your money it will take quite longer than usual. Keeping some part of the wealth liquid is also important so that you can use it in times of emergencies and don't fall in traps like loans.
2. To make more money from it : Rich people always keep on increasing their wealth by re-investing their earned money. They often lend their money to the needy people and make more money from the interest which they are getting in the sum of the lended money each month.
2. Real Estate :
Everyone in this world would have heard dof real estate. It's one of the favourites of people when it comes to assets. There are two ways you can make money by real estate :
1) Renting Property : You can buy a house and you can earn money from it by giving it on rent to some other person. You will earn money by the rents paid by your client.
2) Selling Property : Once you buy property you can hold your position there because the value of properties increase day by day and if buy a property in a developing area , you are surely going to get good returns in 5-6 Years.
There are different types of real estate from which you can make money. Some of them are :
1) Residual building : These buildings are used by people to live in it. You can make money by renting them or selling your property at a higher price.
2) Office buildings : These are the building which you can give in rent for some other business or individual which would be used for work.
3) Commercial buildings : Businesses can use your Property for storing and selling their products and pay you rent for it.
4) Land : You can make different uses of land for example cultivation , building houses or even living it as it is for earning appreciation.
3. Bonds :
Bonds are something which are introduced by the government or private companies who are in need of money and borrow money from you upto a fixed term. They vow to pay you some amount every month and when you reach the end of your term you will be payed the total principal all together. They give a usal return of 3-4% but are really safe.
4. Stocks :
Stocks are not as complicated as it may seem. Stocks are introduced by those companies who need more money to grow and when you buy the shares or the stocks of the company you are also a part of that company and if the company grows in future you can sell your stocks and earn appreciation.
For Example : There is a Company which issues $10 million shares in the market and if you but $1 million of it you are a shareholder of that company and you can sell your shares once the company grows in order to get appreciation.
5. Mutual And Index Funds :
These are also a way of investing like stocks but in mutual funds you invest in several companies at one time whereas in stocks you only invest in one company. These are more better cause it lowers your risk by diversifying your portfolio into many other companies which decreases your rate of loosing money.
6. Equipments :
Anything which helps you earn money and increase your wealth is also termed as an asset.
For example :
1. If you are a farmer then your tractor is an asset as it is helping you cultivating the field and make money from its yield.
2. If you are a programmer then your laptop is an asset as it is helping you to do your work and earn money.
7. Patents :
You can make an insane amount of money by inventing new things and applying patents on it so that someone else doesn't copy your idea and if they do they have to pay some amount of money to you and if they do not you can stop them from using it.
8. Trademarks :
If patents protect your inventions then trademark protect your words , symbols or phrases and if anyone uses it they have to pay you some amount of money or if they deny then you can stop them from using it.
9. Brand And Goodwill :
To understand these two terms you first have to understand the difference between these both :
1. Brand : A Brand is a company which is selling their products to you and are trying to fit in the market. If the brand was bankrupted Tommorow you would not care that much.
2. Whereas Goodwill are also companies who sell you their products but they have gradually created a positive effect on your mind about their product and if this good will is going bankrupt then you will care and also try to save it.
For Example :
A black t shirt normally sells for $1 but if you put a a mickey mouse sticker on it then it would be valued $5.
10. People :
You may see that companies are growing in their buisness, some companies are also introducing new sales, schemes and many more , but all of these things are done by the people in that company and since they are working for the company and growing it they are also termed as an assets for the company.
Conclusion :
Assets are a very good medium to increase your wealth , but you should always remember that investing in assets are not encouraged for doing full time instead it should be done as a side business . Another important thing to remember is that assets don't always give you profits. It can also perform poorly and affect your portfolio.
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