Have Assets, Have Financial Freedom Growing up, my family didn't have much. Additionally, I had little understanding of money. In fact, I wasn't able to determine what I wanted to do until I was a...

Growing up, my family didn't have much. Additionally, I had little understanding of money. In fact, I wasn't able to determine what I wanted to do until I was a freshman in college. Through a sequence of events, I learned a lot about money relatively quickly. My mindset was also the right one for building wealth, which I didn't even realize.

As long as you're reading, you're already taking steps to grow wealth. Now, I'm not talking about becoming rich. Instead, I'm focusing on building wealth.

Why? What separates a rich person from a wealthy person is the sustainability of the wealth. A wealthy person doesn't have to worry about money for the rest of their lives, unlike a person who has only their money for a short period of time.

In addition, wealth is crucial to weather financial hardships such as unexpected medical expenses or a loss of employment. With credit card bills, student loan debt, rent or mortgage payments due every month, many people find it difficult or impossible to build wealth. However, it really comes down to tangible and intangible assets.

Tangible Assets

Tangible assets are items with a physical form or market value that provide value to their owners. In addition to cash and accounts receivable, tangible assets include vehicles, stocks, mutual funds, and marketable securities.

A tangible asset usually has the following features:

• Being physically present. A tangible asset can be felt, seen, or touched. You can see a stock certificate or move your vehicle, for example.
• The value that is easily accessible. A tangible asset's value can be determined from its original cost, book value, or market value. It is important to understand that tangible assets have a different value from intangible assets – assets without physical existence, like a patent, computer software, or research and development.
• A potential collateral source. A tangible asset can be used as collateral for a loan if the loan defaults.
• Subject to depreciation. For example, companies depreciate long-term tangible assets on their financial statements.

A tangible resource includes all current assets and noncurrent assets.

• Current assets. Usually, a current asset is consumed or converted into cash within one year.
• Noncurrent assets. A noncurrent asset has a longer useful life or is required to be held for more than one year in order to generate a benefit.

Where to Start Investing

When it comes to investing, trial and error is the best way to learn. Taking advantage of the account, you experiment with some ideas you've come up with. Over time, you'll learn what works and what doesn't, and you'll build a foundation of knowledge that will grow with you.

Opening an account and investing in a mutual fund was my first investment. When I started investing, I had only $25 per month to invest. But, it was a start.

To learn about cryptocurrencies, I opened an account on Coinbase and invested $1,000 to start. I wouldn't say that's life-changing money. However, that is the way I chose to jump in – headfirst.

My knowledge of other investment platforms was also gained through this method. Betterment, Fundrise, and Lending Club all drew me in after I opened an account and invested some money.

In short, if you want to build wealth, you need to start investing. A platform like Robinhood, Ally Invest, or M1 Finance is an option, as well as one of those I mentioned already.

In the end, it doesn't really matter so long as you open an account. As you go, you will also learn how to invest and strive to read as much as possible. As you learn what works and what doesn't, you'll also discover how your investing style and risk tolerance contribute to your success.

Other investments.

After getting your feet wet with investing, here are some other investment accounts you should consider.

• Bonds. A person buys shares of a company in the hope that the company will increase in value in the future. Bonds are generally more stable than stocks, but if a company goes bankrupt, you'd still suffer losses.
• Commodities. The term "commodity' refers to tangible items such as oil, grains, and precious metals. If you bought, say, two ounces of gold last year, and the price increased this year, you would be able to sell it for a profit.
• Exhange-traded funds. You can buy, sell, and trade shares of ETFs throughout the day since they pool diverse investments such as stocks, bonds, commodities, etc.
• Real estate. Many people gain substantial wealth through homeownership. Additionally, this can include land development, house flipping, and landlording. Real estate investment trusts (REITs) are also available. These are similar to mutual funds. It involves buying shares in a fund that manages properties on your behalf.
• Retirement. investing money can help us prepare for a more abundant future. Many people envision a work-free future. That's why investing for retirement has become a business in and of itself. Money can be invested to prepare us for a more prosperous future. It is common for people to dream of a future in which they do not have to work. This is why investing for retirement has become an industry of its own. This can include IRAs, 401(k)s, and annuities.

Intangible Assets

Assets that cannot be seen or felt are intangible. In spite of this, you can still use such assets to their financial advantage. To drive revenue and earn a profit, you can leverage your solid professional reputation (which is nonphysical).

Some common intangible assets include:

• Brand equity, or a brand's value and ability to generate revenue and profits.
• Intellectual property, such as patents, copyrights, and trademarks.
• Licensing and rights.
• Research & Development.
• Customer lists.
• Goodwill, an indicator of how valuable your brand is based on factors like your reputation.

How to Invest in Yourself

The stock market, starting a business, buying a home, or investing in stocks are probably the first things that come to mind when you think of investing. Even though those actions contribute to wealth building, improving yourself can provide far greater returns.

In fact, Warren Buffett believes investing in yourself is the best investment you can make.

But how do you get started?

Well, the most obvious is through education. The financial gain you can reap over time by investing in your own education can help qualify you for a better job or gain a promotion. After earning a bachelor's degree, your education doesn't have to end. In addition to in-school student loans, a credit union may also offer parent loans through Sallie Mae Bank or another lender partner to help pay for continuing education classes or certifications.

Consider this if you're still not convinced. If you had a savings account earning 2% interest, you would have to save $300,000 to earn $6,000. Nevertheless, if you receive a promotion or a raise as a result of additional education, you can earn this amount much more quickly.

Additionally, there are plenty of online platforms where you can literally learn anything. For example, I spent $97 on a YouTube course. In just 30 days I learned what would have taken me years on how to make money on YouTube.

With that in mind, here are some platforms worth exploring;

• Masterclass
• LinkedIn Learning
• Coursera
• Skillshare
• Books
• Youtube
• Udemy
• Khan Academy

Investing in your brand.

Another intangible asset that you should invest in? Your brand.

But, wait. Isn't a brand just your logo? No. It's much more than that.

You are making a promise to all those who come into contact with it. It represents your commitment to your customers, employees, audience, and community. In addition to telling your story, your brand helps you build trust and differentiates you from your competitors.

The investment in branding is one that, if done right, can yield exponential returns over time.

As I started my financial planning career at 28, most of my clients were retirees — or at least close to retirement. To convince them that I was the right person to manage their nest egg, I earned the CFP designation.

I didn't have to become a CFP. However, it accelerated my financial knowledge. And, more importantly, these credentials elevated my brand. How? Well, it showed others that I'm just not just another financial planner. I am a certified financial planner. And, there were only 3 or 4 other CFPs in a 45-mile radius of where I used to live.

So, even though I couldn't touch these credentials, investing in my brand separated me from the competition and built trust with potential customers.

The best intangible asset I invested in.

One of my best intangible assets, however, was investing a thousand dollars in a coaching program. I attended four in-person sessions per year, but I walked away with a new perspective. In fact, this new mindset wasn't just associated with my business. I also changed how I approached life.

Overall, this program helped me work smarter, not harder. The result was that I went from making $250,000 a year within three years to making almost three-quarters of a million dollars. All from an investment of nine thousand dollars

FAQs

What are assets?

Assets are things you or a company own that are of economic value. A tangible asset, such as a car or piece of business equipment, can be sold and converted into cash; or an intangible asset, such as a registered trademark, can be sold and converted into cash.

How do assets work?

Assets are generally acquired by individuals and companies in the hope of providing future funds. An individual may begin a 401(k) or IRA to ensure financial security upon retirement, for instance. Similar to a real estate purchase, a company may purchase an office building to facilitate work and profit.

An asset can, however, become a liability with any financial decision. For instance, when you buy a stock, you may earn or lose money. In addition to asset-backed loans, such as mortgages, you can also have a liability-backed loan, which is backed by the value of your home.

What's the importance of assets?

In order to determine a company's or individual's net worth, assets are important. A greater net worth is a sign of a better financial standing, since assets are worth more than liabilities. In times of financial hardship or loss of income, assets can be useful to cover expenses and cover losses.

As part of the home loan application process, assets can be an important factor. In determining whether your loan will be approved, lenders consider liquid assets like cash and bank accounts.

What's my assets' value?

You can determine the value of your assets in a lot of different ways, depending on what assets you have. For example, you can find the value of your house online or by looking at comparable homes in your area. You can link various investments, retirement accounts, other assets, and liabilities to your budgeting app or investment platform to see your net worth and breakdown.

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