Assets Not Liabilities is the Key
Assets get you money while liabilities cost you money, I do not think we need to explain this again to people because it is written in white and black but some people still need to be reminded and the more assets you have, the more richer you are since they bring in money. Some people might mistake some liabilities for assets and some would mistake some assets for liabilities so in this post, I want to discuss assets that make the rich richer.
The rich invest in cash since cash put in the back would surely earn profit but then, is the profit complementing inflation? You must have heard that cash is king, and the rich do not joke with it. A lot of wealthy people have cash in reserves because they know it is the best form of asset even to buy other assets. It is easy to do deals in cash with no charges or taxing, also lending with higher interest is possible with cash (Peer to Peer lending).
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Another place rich people invest money into is real estate and while some people still do the traditional rent and sales, some do short term rentals to get higher returns like AirBnB. Thanks to demand for where to live as a result of increasing population as well as people wanting to get more properties to themselves, the prices of houses are increasing and they will continue to go up. Real Estates can be residential, commercial, office building, or land but so you do not mistake asset for liability, the house you live in, if not bringing in money is a liability.
Bonds is another investment that the rich invest in. We all know that there come times when businesses and government need money, and at this times, they release bonds where they promise to pay the buyers a particular percentage for a particular period of time of holding because bonds have an expiry date on them. The rich spend money buying bonds because they are safe investments range but then they are in the low investment low reward type of investment up to about 3% annual return. Stocks is another investment that rich people invest in, In fact if they want to carry out an hostile takeover, they just do it via the shares. For people who do not understand how he market works but want to be safe, they go for mutual or index fund which is a combination of many stocks in one.
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Any tool that generates money for you is an asset so equipment are. If you are a farmer, a tractor is an asset, a Laptop can be an asset for you if you are using it to generate money. If an equipment is not bringing money into your account, it is a liability no matter how much you try to make yourself feel good about it.
They also invest in Patent and Trademarks as it helps them get money when people want to use it for commercial purposes. It might not sound like a lot to you now but trust when I say a lot of major companies and people pay to use different patents and trademarks. Companies as well as the rich also invest in Brand and Goodwill because this is the way the company looks to the public.
The rich invest in people and so do companies. Talking about companies, they are just names, ideas, and innovations brought by people, so they cherish and invest in people. Nothing exists without the people there and investing in them makes it easy to attain greater heights.
While you might want to spend your money on frivolous things which I cannot define that for you as what might be frivolous to someone might not be to another, remember to invest in assets more.
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