Wealth Comes From Owning Assets

So, as you know, the whole wealth-building process is about building assets. So what is an asset? Well, I have my own definition for that, and the wealth-building definition of an asset goes like this. 'An asset is something you own, but is not you. It puts money in your bank account while you are asleep, and you can pass that money on to people you love and to good causes, and it does not end when you are not there.'

 So you can see in that definition there's a whole host of different things for us to discuss in a little more detail.

 'An asset is something you own that is not you and you can pass it on.' Well, by definition then, if how you're generating your income today is from a job let's say, then there's a very big difference between generating an income from an asset and generating income from a job.

 I'd like to discuss that just a moment because work income and asset income are fundamentally different things. So work income is trading time for money, and it isn't something you can pass on. It's temporary. So you can't pass on your job, for example. So as a result of that, if you're spending more of your month earning income from work and less from earning income from assets, then that's going to slow down your whole process of building wealth. So have a think about how much time every month you'll spend building income from assets compared to building income from your job.

 The second aspect is that income from assets puts money into your bank account while you're asleep. And again, that's very different from earning an income from trading time for money. Now, whether that's self employed or whether that's a job or whether that's a business that demands you being there, they're two fundamentally different things.

 There are seven assets, and we're going to cover each of the different assets so you can see how they generate income, which can be automatic. And if that income is automatic and it does put money into your account while you're asleep, then you're building, layer by layer, more and more ways that you're moving towards a place of complete financial independence.

 The third aspect is that the income from assets you can pass on to the next generation, whether that's people you love or indeed to good causes or a combination of the two. If you're earning money from your own time, then of course when you're no longer there, the income will stop, so there's a fundamental difference there.

And that really encompasses the whole point about building wealth from assets: it's an automated process.

It begins to create the idea of certainty so that you can move upwards towards that feeling of complete and utter financial independence, as opposed to uncertainty when you're trading time for money because that income will come to an end. When you stop showing up, the money will stop showing up, and that's not really a great place to be.

'If you're spending more of your month earning income from work and less from earning income from assets, then that's going to slow down your whole process of building wealth.'

Kevin Whelan

Founder, WealthBuilders

Taken from the WealthBuilders Blog