What is an Asset and why do you want more of them or do You Want More of Them?

Assets are resources with economic value. On a balance sheet assets should equal your liability and equity. The expectation is for assets that folks own to provide economic benefits now and/or in the future. Assets are not always profitable though, especially when it comes to property and when one needs that property as return on investment will depend on many factors (renter, taxes, insurance, repair costs etc.). If managed appropriately, assets should increase you or your company’s worth and the ability to produce cash flow.

Many folks have the desire to own real estate and build a rental property empire, however they don’t bother learning the business. Even though these folks may be able to compile many assets, the assets they own may not be profitable and meet their expectations. All of a sudden their assets become a burden and a bad problem for them as they probably had to use capital to buy those assets and all of sudden they don’t have the liquidity they need. While assets can increase your worth and give you credibility with banks and investors, they can also do the exact opposite if you don’t do your homework and manage your asset correctly.

Personally, I believe in buying many assets, however I don’t believe one should go that route if they have not done their homework and are not ready to oversee their investments closely. When I look to buy real estate/assets, I market to those folks that have vacant homes in other words they have non producing assets. I want to be clear that it is not always the fault of the asset owner that they own these non-producing assets, however it is important for all of us to realize the risks before making investments.

Do your research, talk to other investors, surround yourself with folks you respect and make an educated and informed decision. Assets can make a person extremely wealthy, however they can also have the reverse effect. My recommendation is to buy assets but make sure you do your research before you do. Happy Investing.