﻿15 ASSETS THAT ARE MAKING PEOPLE RICH.
It is a well known fact that wealthy people possess many assets that fetcch them both passive
income (Passive income is income that requires little to no effort to earn and maintain) and
active income (Active income is income earned as a direct result of a specific effort) and
they just don't depend on one source of income. Most people want to amass wealth and for that
to happen you need to acquire knowledge on the types of assets to invest in. Acquiring
this knowledge not only helps you amass wealth but also prevents you from buying liabilities
thinking they are assets. Before we jump right in to the 15 assets that are making people rich
we have to understand what an asset is. An asset is an item or property owned by a
person or company, regarded as having value and available to meet debts, commitments,
or legacies while a liabilityis a thing whose presence is likely to put one at a disadvantage
that is liabilities take money out of your pocket. Welcome viewers to another wonderful
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1. # STOCKS. A stock is a share
of a company held by an individual or group. When you buy the stock of a company, you’re effectively
buying an ownership share in that company. Does that mean you get to sit next to Tim Cook
at Apple’s next shareholder meeting? No. But in most cases, it does mean you get a right to vote
at those meetings, if you choose to exercise it. But the primary reason that investors own stock
is to earn a return on their investment. That return generally comes in two possible ways:
The stock’s price appreciates, which means it goes up. You can then sell
the stock for a profit if you’d like. The stock pays dividends. Not all stocks
pay dividends, but many do. Dividends are payments made to shareholders out of the company’s revenue,
and they’re typically paid quarterly. Companies sell shares in their business
to raise money. They then use that money for various initiatives: A company might use
money raised from a stock offering to fund new products or product lines, to invest in growth,
to expand their operations or to pay off debt.. If you decide to buy a stock, you’ll often
buy it not from the company itself, but from another investor who wants to sell the stock.
Likewise, if you want to sell a stock, you’ll sell to another investor who wants to buy.
When a company sells shares of stock to the public, those shares are typically issued as
one of two main types of stocks: common stock or preferred stock. Common stock:
If you’re new to investing in stock and looking to buy a few shares, you likely want to invest
in common stock, which is exactly what the name suggests: the most common type of stock. When
you own common stock, you own a share in the company’s profits as well as the right to vote.
Common stock owners may also earn dividends — a payment made to stock owners on a regular
basis — but those dividends are typically variable and not guaranteed.Preferred stock:
The other main type of stock, preferred stock, is frequently compared to bonds. It typically
pays investors a fixed dividend. Preferred shareholders also get preferential treatment:
Dividends are paid to preferred shareholders before common shareholders, including in the
case of bankruptcy or liquidation. Preferred stock prices are less volatile than common stock prices,
which means shares are less prone to losing value, but they’re also less prone to gaining value.
In general, preferred stock is best for investors who prioritize income over long-term growth.
it’s best for most careful investors to skew somewhat lower-risk with their picks. With
that in mind, here are five of the best stocks to buy: Adobe (ADBE), Amazon.com (NASDAQ:AMZN),
Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL), Facebook (NASDAQ:FB), Netflix (NASDAQ:NFLX).
2. # BONDS. A bond is a
fixed income instrument that represents a loan made by an investor to a borrower (typically
corporate or governmental). A bond could be thought of as an I.O.U. between the lender and
borrower that includes the details of the loan and its payments. Bonds are used by companies,
municipalities, states, and sovereign governments to finance projects and operations.
Owners of bonds are debtholders, or creditors, of the issuer. Bond details include the end date
when the principal of the loan is due to be paid to the bond owner and usually includes the terms
for variable or fixed interest payments made by the borrower. Governments (at all levels) and
corporations commonly use bonds in order to borrow money. Governments need to fund roads, schools,
dams or other infrastructure. The sudden expense of war may also demand the need to raise funds.
Bonds are commonly referred to as fixed income securities and are one of three asset classes
individual investors are usually familiar with, along with stocks (equities) and cash
equivalents. When companies or other entities need to raise money to finance new projects,
maintain ongoing operations, or refinance existing debts, they may issue bonds directly to investors.
The borrower (issuer) issues a bond that includes the terms of the loan, interest payments that will
be made, and the time at which the loaned funds (bond principal) must be paid back
(maturity date). 3. # REAL ESTATE.
Real estate is the land along with any permanent improvements attached to the land,
whether natural or man-made—including water, trees, minerals, buildings, homes, fences,
and bridges. Real estate is a form of real property. It differs from personal property,
which are things not permanently attached to the land, such as vehicles, boats, jewelry,
furniture, and farm equipment. Real estate is the property, land, buildings,
air rights above the land and underground rights below the land. The term real estate means real,
or physical, property. Real estate is property consisting of land and the buildings on it,
along with its natural resources such as crops, minerals or water; immovable property of this
nature; an interest vested in this (also) an item of real property, (more generally) buildings or
housing in general. Real estate investing involves the purchase, ownership, management, rental and/or
sale of real estate for profit. Five Types of Real Estate
There are five types of real estate: Residential real estate: Any property used
for residential purposes. Examples include single-family homes, condos, cooperatives,
duplexes, townhouses, and multifamily residences with fewer than five individual units.
Commercial real estate: Any property used exclusively for business purposes, such as
apartment complexes, gas stations, grocery stores, hospitals, hotels, offices, parking facilities,
restaurants, shopping centers, stores, self storage units and theatres.
Industrial real estate: Any property used for manufacturing, production, distribution,
storage, and research and development. Examples include factories, power plants, and warehouses.
Land: Includes undeveloped property, vacant land, and agricultural land (farms,
orchards, ranches, and timberland). Special purpose: Property used by the
public, such as cemeteries, government buildings, libraries, parks, places of worship, and schools.
Most wealthy people either make their wealth in real estate or hold their wealth in real estate.
4. # REITs (Real estate invent trust). A real estate investment trust (REIT) is
a company that owns, and in most cases operates, income-producing real estate.
REITs own many types of commercial real estate, ranging from office and apartment buildings
to warehouses, hospitals, shopping centers, hotels and commercial forests.
Some REITs engage in financing real estate. Modeled after mutual funds, REITs pool the capital
of numerous investors. This makes it possible for individual investors to earn dividends from
real estate investments—without having to buy, manage, or finance any properties themselves.
5. # BUSINESS. Business is the activity of
making one's living or making money by producing or buying and selling products (such as goods
and services. Simply put, it is any activity or enterprise entered into for profit. A business is
defined as an organization or enterprising entity engaged in commercial, industrial,
or professional activities. Businesses can be for-profit entities or they can be non-profit
organizations that operate to fulfill a charitable mission or further a social cause. Generally,
a business begins with a business concept (the idea) and a name. Depending on the nature of
the business, extensive market research may be necessary to determine whether turning the idea
into a business is feasible and if the business can deliver value to consumers. there is various
types of business which one can go into and make a good earnings from it. To be honest i have not
seen some one got rich by just by having a job. Owing your own business is a means to attain a
greater height with patience and consistency. Rich people make money through business in many
ways. The can earn an income from a business they start themselves or a business they are a partner
of or someone's business that they invested in and a business they founded many years back and sold.
6. # INDEX FUNDS. Index funds are a way for
investors of modest means to get into the stock market, but the better you become at investing,
the less desirable they are. In short, an index fund is simply a mutual fund where,
instead of a portfolio manager making selections, the capital allocation
is delegated to whoever determines the index methodology. When investors buy an index fund,
they get a well-rounded selection of many stocks in one package without having to purchase each
individually. And because these funds simply hold all the investments in a given index — versus an
actively managed fund that pays a professional to do the stock picking — management fees tend to be
low. The result: Higher investment returns for individual investors.
7. # PATENTS/TRADEMARKS. Copyright, patent, and trademark are all different
types of intellectual property (IP). Although the three types of IP are very different, people often
confuse them. The primary goal of the patent law is to encourage innovation and commercialization
of technological advances. Patent law incentives inventors to publicly disclose their inventions
in exchange for certain exclusive rights. A patent protects inventions. According to the USPTO (
United States Patent and Trademark Office ), “a trademark is a word, phrase, symbol, and/or design
that identifies and distinguishes the source of the goods of one party from those of others.
A service mark is a word, phrase, symbol, and/or design that identifies and distinguishes the
source of a service rather than goods. Examples include brand names, slogans, and logos.
8. # DIGITAL PRODUCTS. A digital product is any product you sell online
that doesn’t have physical form or substance in other words a digital product is an intangible
asset or piece of media that can be sold and distributed repeatedly online without the need
to replenish inventory. These products often come in the form of downloadable or streamable files,
such as MP3s, PDFs, videos, plug-ins, and templates.You can’t hold a website theme in
your hand, smell an e-book, or taste a software program. You can turn digital products into
physical products. For instance, many people buy e-books in PDF format, then print them on their
computers. The product becomes physical, but it started out in digital format. In other words,
your goal as an entrepreneur who sells digital products should be to create more products and
convince your existing customer base to buy them. That’s how true wealth becomes possible.
9. # COPYRIGHTS. Copyright refers to the legal right of the
owner of intellectual property. In simpler terms, copyright is the right to copy. This means that
the original creators of products and anyone they give authorization to are the only ones
with the exclusive right to reproduce the work. Copyright law gives creators of original material
the exclusive right to further use and duplicate that material for a given amount of time,
at which point the copyrighted item becomes public domain. A copyright is a collection
of rights automatically vested to you once you have created an original work. To understand
how these rights can be used or licensed, it is helpful to analogize them to a bundle of sticks,
where each stick represents a separate right vested to you as the owner.
These rights include the right to reproduce the work, to prepare derivative works,
to distribute copies, to perform the work publicly, and to display the work publicly.
10. # AUDIENCE AND SOCIAL MEDIA BRANDS. This is some thing that is very recent,
when few people started making money from it then it got viral in the sense that vividly most people
now wanting to build a relationship with their fans. Every business owner wants to
build community on social media to promote their products. Imagine being able to talk to your
favourite musicians and they respond to you won't it motivate you to want to buy more of their CDs
and download their songs. 11. # COMMODITIES.
A commodity is a natural resource or agricultural product that is traded in bulk.
They are sold by the companies that produce them and bought by companies that use them. Commodities
such as crude oil, gold, silver, guns and bullets are the most common commodities people invest in.
One of the biggest benefits of investing in commodities is the fact that they tend to protect
investors against the effects of inflation. Generally, demand for commodities tends to
be high during periods of high inflation. Aside from the benefits of diversification,
there is the potential to maximize returns with commodity investing. Although commodity prices
are subject to fluctuations in the market—exchange rates, interest rates, the global economy—global
demand is strong. This has an overall positive impact on the stocks of companies that deal
specifically with commodities, which can translate to positive returns to investors.
12. # PAPER ASSETS. Paper assets refer to assets
that are representations of something. Paper assets in investments literally are pieces of
paper that define ownership of an asset. Classic examples of investing paper assets prove to
be stocks, currencies, bonds, money market accounts(money market funds), Mutual funds,
Insurance plans and similar types of investments. Investing in paper assets can be a good way of
growing your wealth easily without much labor or stress and with minimal risk of capital loss.
Investing in paper assets is very passive, your money keeps making interest while you do other
things, especially if you are an employee with a very high time demanding job. Paper assets will
give a moderate and steady income ( depending on the amount of capital you invest in it
).Paper assets are usually risk free, with guarantees (and some come with insurance
against loss). This means that there is little or no chance of losing your initial capital.
Paper assets can be used as collateral to seek and secure loans from the bank. Equally,
paper assets usually don't have very high interest rates unless you invest with large sums of money.
13.# FINE ART. Art can do more than brighten
a living space. The art market has become one of the hottest new investment crazes in recent years.
Painting and sculpture collectors frequently buy pieces with an eye towards adding to their
investment portfolio. Like stocks and bonds, art can increase in value. If an up-and-coming
artist goes on to a successful career, the cash value of their work will skyrocket. Art is a
long-term investment profits from art won’t happen overnight. Experts recommend art investment for
patient investors with a time window of 10 years or more, so think long term. Many art investors
include paintings in their estate planning as assets to pass on to their descendants. One
major perk of art as an asset is that its value doesn’t rise or decline with the stock market.
Even if your stocks aren’t performing well, your art investment may be doing great—good
news for the savvy investor who wants to diversify a portfolio and minimize risk. And ideally, though
not always, art will continue appreciating in value over time. Every artwork is unique, and the
art market has ups and downs just like any other market. Since it’s impossible to determine an
artwork’s true value—a lot depends on the artist’s reputation and on the economy as a whole—you
should be comfortable assuming some risk. 14.# FRANCHISES.
A franchise is an authorization granted by a government or company to an individual or group
enabling them to carry out specified commercial activities, for example acting as an agent for
a company's products.Franchises offer the would-be business owner an opportunity to obtain a business
with a well-established brand name that provides recognition and a competitive advantage in the
marketplace. Having a franchise name provides you with an intangible asset. As an asset, the
franchise name that you obtain can be listed among your expenses and included as part of
your tax information. As a franchise owner, you may be required to pay various fees and expenses.
The franchise you purchase becomes an intangible asset that goes on your business balance sheet
and is recorded as a noncurrent asset, according to Reference for Business.
This is generally written off as an expense on your balance sheet and affects your bottom line
when it comes to taxation. The reason that this intangible asset can be recorded in this way
is because there is generally some type of fee associated with a franchise.
15.# MUTUAL FUNDS. A mutual fund is an open-end professionally
managed investment fund. Mutual funds are one of the most popular ways Americans invest, thanks
to their ease of use and built-in diversity. Less easy for new investors may be sifting through
the thousands of mutual funds on the market. Generally speaking, there are four broad types of
mutual funds: those that invest in stocks (equity funds), bonds (fixed-income funds), short-term
debt (money market funds) or both stocks and bonds (balanced or hybrid funds). Every
mutual fund is designed to spread around risk while capturing wider market gains.
Some types of funds carry a higher amount of risk than others, but also higher potential rewards.
Mutual funds have advantages and disadvantages compared to direct investing in individual
securities. The advantages of mutual funds include economies of scale, diversification,
liquidity, and professional management. However, these come with mutual fund fees and expenses.
When mutual funds increase in value, the profit is shared with the investors.
That distribution can then be reinvested to buy more shares of the stock. Those shares
make more profit, which can be reinvested and on and on.There are four broad types of mutual funds:
Equity (stocks), fixed-income (bonds), money market funds (short-term debt), or
both stocks and bonds (balanced or hybrid funds): Equity mutual funds buy stocks of a collection of
publicly traded companies. Most mutual funds on the market (55%) are some type of equity fund,
according to the Investment Company Institute. Equity funds have a higher potential for growth
but more potential volatility in value. The younger you are, the more your portfolio
should include equity funds, financial planners advise, as you have more time to
weather inevitable ups and downs in market value. INDUSTRY OR SECTOR FUNDS: These mutual funds focus
on a particular industry, such as technology, oil and gas, aviation or health care. For example,
investors who want exposure to gains by companies like Google and Apple could put
money in a technology fund. Ownership in different sector funds can help diversify your portfolio,
so if one industry is hit hard those losses can be offset by gains in other sectors.
GROWTH AND VALUE FUNDS: The investment style of the fund is another mutual fund differentiator.
Growth funds, as the name suggests, seek stocks that fund managers believe will have better than
average returns. Value funds look for companies whose stock is undervalued by the market.
INTERNATIONAL, GLOBAL AND EMERGING MARKET FUNDS: Geographic location can also determine how mutual
funds are built. International funds invest in companies doing business outside the U.S.,
while global funds invest in companies doing business both in the U.S. and abroad.
Emerging market funds target countries with small but growing markets.
Bond funds: Bond funds are the most common type of fixed-income mutual funds, where (as the name
suggests) investors are paid a fixed amount back on their initial investment. Bond funds are the
second most popular mutual fund type, accounting for about one of every five funds on the market.
Money market funds: Money market mutual funds are fixed-income mutual funds that
invest in high-quality, short-term debt from governments, banks or corporations.
Balanced funds: Also known as asset allocation funds, these investments are a combination of
equity and fixed-income funds with a fixed ratio of investments such as 60% stocks and 40% bonds.
Thanks once more for watching. These are a few assets generating income for people,
do well to comment and tell us what assets you think is missing from the list.