Accumulate Assets And Avoid Liabilities: Best Assets To Buy

What Are Assets And What Are Liabilities? Anything that appreciates (value increases) over some time is considered an Asset. Anything that depreciates (decreases in value) over some time is considered a Liability.

Why Accumulate Assets And Avoid Liabilities? When you start and don’t have any money, I highly recommend improving human capital. Your human capital would be your best asset to leverage to achieve financial freedom.

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Best Assets To Buy

When you consider investments, there are several assets to invest in. Each asset has some pros and cons.  The best asset to buy depends on your risk profile, time, knowledge, and unique circumstances.

1a. Stocks A stock is a share in a company. The reason the stock prices go up over a period of time is because a company makes more money.

#1 Paper Assets

1b. Fixed Income (US Treasury, Certificates of Deposits, Bond Funds, Peer-to-Peer Lending) Bonds, Certificates of Deposits (CDs), or Peer-to-Peer lending typically provide cash flow in the form of interest payment because you have lent the money.

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1c. Real Estate Investment Trusts (REITs)

This is the most hand-free method of real estate investing. REITs make money  by renting, leasing, or selling the properties they own.

1d. Asset-backed Lending

Unlike Peer-to-peer (P2P) lending, asset-backed lending involves making loans against an asset. It would be best if you found out the value of the asset. And loan only up to a certain percentage of that asset.

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