- December 20, 2021
- Posted by: Virg Cristobal
- Category: Finance
How to Build Your Asset Column – If you’re not retired or started to take any retirement funds you are still in the asset-building or wealth accumulation stage of life. This is anywhere from 18 years of age up until 65 or potentially longer depending on when you want to retire. This is the time in your life where you start to build and accumulate wealth. This could mean from independent assets, inheritances, but primarily, it’s from your income, typically from a job.
Asset Column and Liabilities
Your Asset column are those things that allow your money to be working for you whereas liabilities are debts or items that are using your money, utilizing your funds, or costing you interest. It’s important to have a balance but the more you have in the asset column versus the liabilities column, the better off you’ll be in the future. Chances are, those that are under 50 years of age may not see Social Security.
The Social Security balance has slipped and by the year 2035, we may have run out of Social Security. People are living longer and taking more of their share of the pot so it’s important to build assets and accumulate wealth as if Social Security will not be there. No one can really give an accurate answer of whether it will be or won’t be, but the numbers don’t look good.
How to build an asset.
Building an asset is simply increasing the amount of money or access to money that you have by acquiring things that have present or future monetary value. These could be actual items such as jewelry, vehicles, or other tangible items. Having cash is not the best way to accumulate assets as your spending power goes down as inflation goes up. However, the more assets that you acquire, the higher your net worth is.
What is an asset?
An income-producing asset allows you to invest to start earning passive income either immediately or when you retire. These could be in the form of:
- Certificates of deposit (CD’s)
- Real estate investment trusts (REITs)
- Dividend-yielding stocks.
- Property rentals.
- Peer-to-peer lending.
- Creating your own product.
Digging deeper, they can be property, short-term rentals, businesses, index funds and ETF’s, lending, trusts, and tax liens as well. All of these items have different benefits and work for different situations.
Most people build asset columns in four major areas, the stock market, real estate, digital or cryptocurrency, and education. Yes, education and information is one of the best assets you can have. If you don’t understand something you could be losing money so educating yourself ahead of time by taking classes, reading books, and investing in seminars are one of the best ways to learn how you can get your money working for you rather than you working for your money.
Investing and building an asset column can be confusing and very daunting if you don’t know what you’re doing, which is why education is really the first step. If you truly want to build wealth you need to start building assets. Plus, you don’t need millions of dollars to begin, either. A few thousand dollars can get you started in either real estate investing or stocks and crypto current.
While we have no idea how Crypto-Currency will work in the future, we do know that the stock market and index funds have always had an upward trajectory. Yes, the stock market can be a wild ride but for those that hold on and are brave, they can come out at the end a lot wealthier.
For more information on understanding assets, building your asset column, and where to best invest your money, contact Chrome Advisors today.
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