Why You Need Assets – Jerry Fetta
What is an asset? The dictionary defines it as “a single item of ownership having exchange value.” Ironically, the root origin of the word asset means “enough”. As in having enough money to meet one’s obligations. I first learned about assets when I was 17. A high school teacher of mine, had us read Rich Dad, Poor Dad by Robert Kiyosaki. Although I didn’t actually read the book when it was assigned, we discussed assets in class. I didn’t quite understand what I came away with was that assets are things that put money in my pocket. As I’ve learned more and more about money, I’ve further defined an asset. My definition of an asset is a single item of ownership that produces INCOME. That’s right. I define assets by whether or not they have a yield of income. Why?
1. Time must be traded for money. At the end of the day, we have to have money. If we want to live, feed ourselves, have a roof over our heads, and experience life it all requires money. Money can only be gotten through various forms of exchange. Most people trade their time for money and never get to live life they way they desire. Why? Because to live a life by design, we must have freedom of time. The only thing that can be traded for time is money. So we’re faced with two options. First, we can earn income by exchanging our time for it. Or second, we can own assets that produce income and have those assets exchange their income so we can have our time. If we want the second option we must own income producing assets.
2. Money goes down in value. We were taught a very small amount of information regarding inflation. Inflation is the reduced purchasing power of our dollars. Despite what experts may tell you, the only way to beat inflation is to out earn it. I love gold & silver and I invest in them myself, but I understand that increasing my income faster than the rate of inflation is the only way to truly have my purchasing power secured.
3. Assets have intrinsic value. Because money has no intrinsic value, it is important to own things that do. A real, income producing asset like a business, real estate, etc. has intrinsic value because something must be exchanged with the world to create the income. If money didn’t exist and you owned real estate, you could trade shelter for food. Why? Because having a roof over our head’s is intrinsically valuable. If you owned a business you could exchange your service for another’s service. Why? Because the product of your business has intrinsic value.
No matter what, we need to own assets. The only way to own assets is to earn income, save your income, and use it to acquire income producing assets. The things we’ve been taught to spend money on are not assets. A house is not an asset, a car is not an asset, a college degree is not an asset, and I would even argue that your 401k is not an asset (if you don’t agree, click here so we can talk about it). WealthX wants to help you build assets with our WealthX University and Coaching program. Our average client sees a 30% increase in income, an increase in their savings rate, and secures 8-12% fixed annual returns on real, cash flowing assets. Click here to schedule a free 30 minute coaching call.
Jerry Fetta is a husband, son of Yahweh, Entrepreneur and owner of 5 privately held businesses. Jerry lives in Alaska with his wife and 2 dogs. His no-nonsense approach to business, finances, and life speaks truth and provides clarity to his clients and followers. His personal mission in life is to empower millions of leaders to own their God-given, ultimate potential.