How well do you know your assets? How often do you talk about money with your assets? What kind of relationship do you share with your assets? How often your assets work back for you?
The above questions may seem odd to a common eye but when looked from the perspective of finance, the answers to the same questions would be significant in increasing your pace towards attainment of ultimate financial freedom.
Assets are to be treated as assets and not as liabilities. Your car or your real estate property or even your gold for that matter won’t qualify as your assets if it doesn’t generate money for you and remains stationary. Yes, YOUR ASSETS TOO CAN WORK BACK FOR YOU just like how your money works back for you.
(P.C: Google Images)
Let’s take the below case study to better understand how to apply this in our lives:
Ms. Shafina is an entrepreneur and a single parent of two. She has two apartment houses registered under her name both of which are lying idle that is it’s lying idle and nobody is staying there.
Though she has no dearth of money to lead a life of ease, she still needs extra money as she’s planning to expand her business. In order to do so, she started working out various alternatives like taking a loan at a suitable rate of interest or borrowing money from peers or diluting her share in the business etc but not once she did think of leveraging the two apartment houses to raise money nor did think of placing her share of gold lying idle with a bank or a jewellery showroom to earn interest from the same and raise money.
(P.C: Google Images)
Therefore Ms. Shafina had the alternatives right in front of her eyes but she never thought of these options or she probably just ignored these options thinking they wouldn’t generate much returns.
“How many of us are like Ms. Shafina? Are you on the same boat as Ms. Shafina?”
If you are, then it’s something to reflect over. By renting those two apartment houses Ms. Shafina would’ve surely raised enough to expand her business or at least to that extent her loan amount would have been reduced. Just as in the above case study, we generally happen to neglect such easily accessible income generating opportunities either knowingly or unknowingly and think that it’s ok when actually IT’S NOT OK! That rental amount on the extra room or apartment or car, that interest amount on gold etc are all prime examples of how can one make their assets work back for them. Income earned from such streams contributes as your passive income. This passive income can come to your rescue and may even be successful in pulling you out of any serious debt which you’re facing.
Purpose of doing the above: It’ll lead to Increase in your cash flow Increase in your net worth (provided that with increase in cash flow wouldn’t lead to drastic increase in your expenses) Increase in ease of living & happiness quotient.
(P.C: Google Images)
The crux here is anything that is kept idle may it be your business/gold/fixed assets/liquid cash etc, wouldn’t generate money for you. It is your responsibility to make sure that every part of your asset works back for you so that with this extra income earned consistently would help you to reach your financial goals and financial free life with ease. Income generating opportunities are present everywhere, it’s your responsibility to look for them and leverage them to your advantage as YOUR FINANCES ARE YOUR RESPONSIBILITY.