How much do you think Jeff Bezos makes per day? A hundred thousand dollars? How about a million dollars? A million dollars a day means 365 million dollars a year. But in 2019, Bezos earned 39.2 billion dollars, which means, if you divide it into the number of days in a year, that will amount to 107million dollars every 24 hours. Isn’t that insane. But that’s not by accident because rich people are focused on buying assets.
An asset is basically something that consistently puts money back into your pocket. Unfortunately, we mostly spend our money buying liabilities such as cars, phones, and houses that constantly take money out of our pockets, that’s why we don’t see our wealth grow as much as rich people do.
In fact, some people are in so much debt that they get poorer every day since interest is so high. That’s why here on this blog, we are going to explore the seven most important assets that the rich buy to get richer, so make sure to read carefully because it might be one of the most valuable things you will ever learn.
The 7 Income Generating Assets.
- Mutual Funds.
- Real Estate.
- Online Products.
Number one – Businesses If you have ever watched Shark Tank, you probably realized that sharks are trying to buy equity invaluable businesses, especially those with bigger potentials. The best investment you can ever make is ina thriving business. What makes a business different from all other assets is that it constantly produces something, be it a service or a product.
They constantly improve their products or come up with new ones to stay ahead of their competitors. Having a stake in a valuable business is the best way to keep growing your wealth and generate cash flow. Of course, for most people, that’s not an option because buying a piece of a business is simply too expensive, even if we are talking about a corner shop.
However, the financial system we have built over the centuries is so advanced that businesses are broken down into millions if not billions of small pieces which allows almost anyone to own a tiny slice of any multi-billion dollar company by investing in the stock market.
If you want to know more about the stock market, check out our blog on how to buy a stock which links you will find Here.
Royalties In 1999, Jeff Bezos filed a patent for a method of ordering items online. Its called “One Click Buying.” It’s a technique that allows the customers to make a purchase with the payment information that they have used previously and saved. In other words, Instead of manually inputting billing and shipping information for a purchase every single time, a user can use one-click buying by using a predefined address and credit card number to purchase the item.
When you buy an app from the apple store, you don’t re-enter your credit information. You simply double click on the side button and the software will automatically use your saved credit card. And until 2017, apple and every other company that used this technique paid a small royalty to Jeff Bezos for using his innovation.
It might sound silly to you, but that’s how the world works. In order to encourage innovation, governments have set up a system of patents. Since you have worked so hard to innovate new products or services, you will be granted an exclusive 20-year patent where no one is legally allowed to use it except you or the people you have given permission.
Of course, you can use your innovation to profit from it directly, or you can license it to others for a small commission fee every time they use it and potentially earn billions as Jeff Bezos did. It’s probably one of the best passive income ideas ever, however building a useful technology isn’t that easy, that’s why companies, especially in the US file for thousands of patents every year, even if they don’t need it since if someone else uses that technology, they will have to pay them a royalty.
3 Mutual Funds.
Mutual Funds There are two types of money problems. The first one is when you don’t have enough of it, we are probably all familiar with it. But the second is when you have too much money, and you have to manage it. Keeping it under your mattress isn’t a good option since inflation is going to eat it out over time, but neither keeping it in the bank is a wise option since interest on fixed deposits is too low.
However, you have got another option, which is mutual funds. Mutual funds are not index funds! Index funds blindly invest in a certain indexlike the S&P 500, but mutual funds carefully analyze the market and try to beat it at least a small margin. When you invest 1 billion dollars, a 1 percent difference will make a real difference because it will amount to 10 million dollars.
So when you are given an option with 2 or3 percent higher, you are looking into making extra 20 or 30 million dollars. That’s why the rich always try to keep most of their money in mutual funds and just watch it grow over time. An asset doesn’t necessarily mean a physical product or a royalty, but it could also be a skill.
Skill, Of course, it’s not an asset in the traditional meaning, but it is in many different ways. Having a skill that’s always in demand is a constant stream of income, even if that takes some of your time.
Take an example of surgeons, it’s a highly complex skill that requires years of education and training, however on the other side it means, there isn’t much competition and means that you can charge a premium for your service, that’s why a lot of surgeons are actually millionaires since they are paid generously.of course that applies to other professions such as lowers, physicians and so on.
However, with the rise of the internet, skills such as coding, online sales, and programming languages are becoming vital and can be self-thought home. It’s a perfect option for those who are at the beginning of building their wealth. If you don’t have enough to invest in the stock market, you can invest in acquiring more skills that would potentially generate much more in the long run.
5 Real Estate.
Number 5, we have Real Estate Which is probably most people’s favorite type of asset. And that’s not by accident, you can touch it, feel, and it fulfills one of the basic human needs – shelter, which means there is almost always a demand for it. Rental property is probably the best passive income asset you can have.
Of course, that doesn’t mean it doesn’t require any hustle and capital, but it’s manageable to a certain degree. What determines the quality of real estate is its location. Quite often, if it is placed not in the most suitable location, it can turn into a huge liability where you can’t rent it out but still have to pay the utilities.
I personally know people who have inherited properties where they don’t want to live but also can’t rent out since its not a popular destination, but they still have to pay the bills to keep the house free of debt. However, if it’s in a desirable place, it will easily get rented out even if it’s not in the best condition. But you know what’s a much better asset than real Estate.
6 Online Products.
Online Products Like Music. It’s super difficult to come up with good music. However, once you do it, it can continuously generate income. Take an example of Eminem; for the past 20years, he has been at the top of the music industry. The music he has released, such as “I am not afraid”, is still listened by lots of people across the world even though it was released back in 2010. And with the introduction of Spotify and AppleMusic, the artists have gained extra streams of income. However, you are not limited to music. Online products are becoming more and more popular such as courses, presets, apps, software, and a lot more.
It might not seem an asset, but if you look at it from a different perspective, they could be much valuable than you think. Great things happen when talented people from different aspects of life come together under one roof. You have a business idea.
Knowing the right people can make starting that business a million times easier. In fact, advice from the right person could save you years of experience if not decades. Since we live in a world of social distancing, try network using digital tools such as LinkedIn or other social media tools.
If you want to connect with me, head to our website, and shoot me a message. This list could be much longer, but I included what I personally think are the most important ones, Thank you.