Money tree - the Income generating assets

HOW TO BUILD BEST INCOME GENERATING ASSETS

Do you know you can build the best income-generating assets of your own? There is an easy way to do this. Only a few people in this world know about this. The major problem is majority of peoples don’t know about how to build best income-generating assets.

Many of us also don’t know about what are assets and liabilities even. This happens due to a lack of financial education. Some people have confusion; they think their liabilities are assets. They spent their whole life with this confusing thought and they never know about that; those people’s lives in poverty. [Also Read about: Rat Race].

WHAT ARE ASSETS AND LIABILITIES?

Assets – An asset is that which are creating income for you. In other words, things that are putting money in your pocket are assets.

Liabilities – A liability is that which are creating expense for you. In other words, things which are taking money out of your pocket are liabilities.

A very good line written by Robert Kiyosaki in his book Rich Dad Poor Dad,

“Rich people acquire assets. The poor and middle class acquire liabilities and they think they are assets.

asset and liability best income generating assets

WHY WE NEED BEST INCOME GENERATING ASSETS?

The majority of people are doing a job and most of them are unsatisfied. The reason for un-satisfaction is they are working hard in a job but not getting as per their talent. And also they accepted that the only job is the area through which they can earn money. [Read also: Salary Increment Performance – Decoding].

Another reason is that whenever the salary increases our needs got completed. When our need level increases, our requirement for salary increment increases. Again, when the salary increase needs got completed. This cycle continues. Salary increment blocks our mind to build income-generating assets.

Our past generation taught us to trade time for money. It means to go to your job put time & efforts and your employer will pay you.

But now time has changed, if we follow what we learn from our generations we will end up with mediocre life.

Here, what rich people are doing? Rich people generate assets. The assets generate income. From the income, they generate more assets.

Many people say money begets money. But film stars, athletes, celebrities who made a lot of money have lost due to lack of financial education. [Check: Are you financially educated]

There are only 4 ways by which people make money. Each method forms one quadrant for income-generating assets. These are:

Employee Cash Flow Quadrant – One person works for others and earns a salary.

Self Employed Cash Flow Quadrant – like doctors, lawyers, shop keepers.

Business Cash Flow Quadrant – Peoples who own a business.

Investor Cash Flow Quadrant – Investor’s income comes from investments.

So, which quadrant you belong to?

Cash Flow for income generating assets

Parag Parikh said in “Stock to Riches”,

“To become rich you must have a passion for money. Making money is a game and you must enjoy playing it. It is tough but worth the trouble.”

BEST INCOME GENERATING ASSETS

# SYSTEMATIC INVESTMENT PLAN (SIP)

You are doing a job and you can easily save some amount from your salary. Whatever you are saving, save at least 20% of your salary. What most of people doing that all savings put in bank accounts. But saving money in a bank account giving you nothing. [Read also: Why Investment is Important for You].

You should invest some amount in the Systematic Investment Plan (SIP). SIP is a kind of solution that is given by mutual funds to invest, for peoples who do not want to invest money directly into the stock market. SIP can be started with as low as ₹500/-. The benefit of SIP is that you can invest monthly, quarterly, half-yearly or yearly. There is no lock-in period; the amount can be withdrawn at any time.

In SIP power of compounding and averaging money can easily make you millionaire. The real benefit always comes in the long term.

# INVEST IN GOLD

Gold is a metal that attracts everybody. Everyone likes to have gold. Gold jewelry attracts every woman. Now gold price touches sky-high. It is very difficult to buy gold directly. Purchasing gold and keep at home is also having safety concerns.

Currently gold prices in India approx. ₹38000/- per 10gm. To buy only 10gm gold you have to lose your wallet which is very difficult for poor and middle-class people.

But very few peoples knew that you can easily buy gold with min ₹1/- also.

Now, you can easily buy gold through MMTC-PAMP buy using UPI apps like Google Pay, Phone pay, Paytm on your mobile apps.

Always keep in mind that invest money in Gold should be taking a long term approach. I mean a minimum holding time of 10-12 years. A great fact about Gold is that in the last 60 years the price increase every 10 years.

# INVEST IN STOCK MARKET

More than 95% of people in India know that the stock market is risky.

But nobody able to answer why it is risky?

The answer is they don’t know how the stock market works. People don’t know the right strategy to invest money in the share market. Everybody knows the Warren Buffet is a very rich person. They also know he is rich through the share market.

But what people don’t know is that Warren Buffet not doing stock picking.

He buys the business. He buying good business and increases his net worth.

India is a growing country and recently Indian stock market crosses 40k mark. And if you look at past 3 year returns, Sensex gives more than 57% return. No other investment tool gives this much return in just 3 years.

Entry with proper knowledge and buy good business gives you risk-free high returns. Stock market actually is money growing tree start with small and keeps it growing.

# BUY LAND

Land is actually the best income-generating asset which is insufficient these days in big cities.

Look big cities like Delhi, Bangalore, Mumbai, Pune, Hyderabad and many more big cities in India.

The best place to buy land is in the outskirts of these big cities.

It will give you more value when you keep it for the long run at least 5-8 years.

# BUILDS YOUR SIDE HUSTLE

Last but not least, building your side hustle is also the best income-generating assets. What your job is giving to you, your side hustle can give you more. Side hustle provides you more stability on your financials. This is a kind of alternative income. And the growth on side hustle depends upon your skills than any other factors. We have more control over our side hustle than our job.

The best part is anybody can do. But you need to give your valuable time after your 9-5 job. It is always better to spend 4-5 years to build business than to work the next 20-30 years in the job.

ASSET ACCUMULATION

When you start working on building your best income-generating assets, eventually you start accumulating your assets. To be financially free one need to acquire assets over time and held for the long term, assets building automatically starts.

Accumulation of income generating assets

FINAL WORDS

Working on your assets and building your net worth eventually makes you rich. Every common man can accumulate assets and generate income. Just to remember three steps: Save + Invest + Lock.

Save from your salary

Invest in the best income-generating assets.

Lock it for the next 5-10 years.

You will get your freedom and not required to think again for financials. Because your assets will take care of your financials, you just need to take care of your assets.

5 thoughts on “HOW TO BUILD BEST INCOME GENERATING ASSETS”

  1. Pingback: Power of Compounding-The Magic of Money Making | The True Investment

  2. Pingback: Why You Require an Investment ? | The True Investment

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