Examples of assets?

[Deleted User]

Hi Everyone,

I have been reading a great book called 'Rich Dad, Poor Dad' by Robert Kiyosaki, I am sure a lot of MSE forum members will have read it given the nature of the content. The idea of buying assets instead of liabilities makes sense, but what I cant think of is what assets could be. I understand that it is anything that is valuable that can make you either passive income or profit, but i cant really think of anything apart from property, which I cant imagine having the money to delve into any time soon.

I suppose that figuring out what good assets are is most of the hard work but is there anyone who could give me low value ideas or point me in the wright direction if you have any ideas?

Any feedback would be greatly appreciated.

Regards
Aiden

Patchwork_Girl

Several examples of passive-income producing asset types are listed in the book - shares, businesses (that you own but don't work in) and intellectual property come to mind off the top of my head. Websites and books/songs are examples of the latter two.

[Deleted User]

Hi Patchwork Girl,

Thank you for the great examples!

somethingcorporate

Investment properties unless bought outright can very easily become liabilities.

Shares, funds, IP as already mentioned are the obvious examples, anything you could own that someone would pay you for.

Rosemary_Jane

Aiden wrote: »

is there anyone who could give me low value ideas

...

Hi Aiden,

It's a great book for getting you inspired, isn't it?

The most basic and easiest asset of all is an interest-bearing savings account..
Kiyosaki's definition of an asset is something that pays you.

When you open a savings account, you are lending the bank your money, and they are paying you interest.
Now, at the moment, the interest rates are awful, and don't even keep up with inflation.
However, you need to keep a certain amount in easy-access savings anyway, as an emergency fund, to prevent going into debt.

This is a great way of learning the habit of amassing money (assets) without feeling the urge to go and spend it.
Think of it as spent on the asset. When you've got enough in emergency access money, then put little chunks in a notice account, that's not so easy to rob.
For example, collect chunks of £400.
£400 in an account getting 3%, will pay you £1 a month for ever and ever, and is an asset.
Collect ten chunks of £400, and you'll be getting £10 a month for ever and ever, and will be learning the joys of owning assets.

Once you get there, then start looking at other assets, bonds, investment trusts, Zopa, etc etc. But first, start with cash in savings accounts; it's easy, low cost and safe.

HTH
Rosemary

antrobus

Aiden wrote: »

Hi Everyone,

I have been reading a great book called 'Rich Dad, Poor Dad' by Robert Kiyosaki, ...

Never heard of it. But what does Google say?

Google says:-

Rich Dad, Poor Dad now a bankrupt dad
http://www.dailymail.co.uk/news/article-2215642/Rich-Dad-Poor-Dad-bankrupt-dad-Best-selling-author-files-corporate-bankruptcy-losing-24m-judgement.html

Should be a few clues there.

lessonlearned

Great post from Rosemary explaining smaller and cheaper assets such as saving accounts.

I would take this a stage further and discuss what a "free" asset might be.

I would say this is your brain. Use it, develop it, feed it, put good stuff into it.

If we are what we eat then I think our brains are what we put into them.

A diet of junk TV, trashy mags and tabloid press will dull your brain, feed it a healthy diet......good quality documentaries on TV, "improving" books, intelligent newspapers and quality magazines.

Join a library and do it for free.

Your biggest investment should be in yourself, in your health, in your education, in improving your skills, in learning how to spend your time wisely.

Ultimately your best "asset" should be yourself.

googler

antrobus wrote: »

Never heard of it. But what does Google say?

Google says:-

Rich Dad, Poor Dad now a bankrupt dad
http://www.dailymail.co.uk/news/article-2215642/Rich-Dad-Poor-Dad-bankrupt-dad-Best-selling-author-files-corporate-bankruptcy-losing-24m-judgement.html

Should be a few clues there.

So what? The first line of the article says he's filed for bankruptcy on ONE of his companies (plural). One of how many?

Here's another view

http://en.wikipedia.org/wiki/Robert_Kiyosaki#Rich_Global_LLC_Bankruptcy

Remember that one of the TV dragons (Jones) has been through the 'build it up, lose it all, build it up again' cycle ...

[Deleted User]

googler wrote: »

So what? The first line of the article says he's filed for bankruptcy on ONE of his companies (plural). One of how many?

That was my exact thoughts when i seen that 'one' of his businesses has filed for bankruptcy haha he strikes me as the type of person to have multiple businesses given he pushes the 'have lots of assets' idea in most if not all of his books.

[Deleted User]

Rosemary_Jane wrote: »

...

Hi Aiden,

It's a great book for getting you inspired, isn't it?

The most basic and easiest asset of all is an interest-bearing savings account..
Kiyosaki's definition of an asset is something that pays you.

When you open a savings account, you are lending the bank your money, and they are paying you interest.
Now, at the moment, the interest rates are awful, and don't even keep up with inflation.
However, you need to keep a certain amount in easy-access savings anyway, as an emergency fund, to prevent going into debt.

This is a great way of learning the habit of amassing money (assets) without feeling the urge to go and spend it.
Think of it as spent on the asset. When you've got enough in emergency access money, then put little chunks in a notice account, that's not so easy to rob.
For example, collect chunks of £400.
£400 in an account getting 3%, will pay you £1 a month for ever and ever, and is an asset.
Collect ten chunks of £400, and you'll be getting £10 a month for ever and ever, and will be learning the joys of owning assets.

Once you get there, then start looking at other assets, bonds, investment trusts, Zopa, etc etc. But first, start with cash in savings accounts; it's easy, low cost and safe.

HTH
Rosemary

Hi Rosemary,

Thanks for your reply, i appreciate the way you explained the idea of how to see the savings account as an asset, it really made me understand clearer how it can be good practice to save in this way before investing in other types of assets i am less familiar with.

jamesd

Do start making some use of unit trust and similar investments in a stocks and shares ISA, though. It's good to get started with the learning early even if initially you use quite low amounts of money.