I read countless books on Investment, Business or Entrepreneurship. Each successful individual has indeed a deeply personal and specific story, this is what makes the reading interesting. However, when it comes to Wealth Management or Wealth creation, there is a single golden rule: to get and remain rich, you need to buy assets.
I’ll borrow the definition of Asset from Robert Kiyosaki (if you never encountered this name, I recommend you get yourself a copy of Rich Dad, Poor Dad). An asset is something that puts money into your pocket, without requiring you to work. On the flip side, a liability is something that gets money out of your pocket while you sleep. See the difference?
An asset can indeed take many form. It can be stocks, real estate that you get a rental income from, a company, some intellectual property (such as a book) or even a YouTube channel.
Why your job is not an asset? When we work we trade our time against money, hence we are actively processing some tasks. That makes you somehow an asset for the company’s shareholders.
Studying rich people, you quickly realise that they direct a significant amount of their revenues to buying assets. Did you know that most of Bill Gates wealth for instance is not made of Microsoft shares or cash?
It does not matter if you have very little savings. The only rule you need to follow is actually to dedicate some amount of your revenue to buy assets. Over time, these assets will generate cash-flow (revenues) that will contribute to your financial freedom.
Let’s recap with that simple video from Robert Kiyosaki:
Read this post on passive income to get to know more about assets you can buy.