Growing Your Assets

This is part two of the mini-series on The 5 Pillars of Financial Resilience. If you haven’t yet watched the episode on Pillar #1 – Being a Great Leader to Your Money – go here and watch that first.

There are five pillars of financial resilience that make up the wealthy ecosystem we all need to create financial security and real sustainable wealth. 

Having these pillars in place enables us to stop stressing about money. No more waking up worrying how you are going to pay those bills or what's going to happen in the future.

Financial stress is the #1 stress in most people’s lives and the #1 cause of relationship turmoil.

In The Wealth Chef tribe, most people tell me that before they finally mastered their money stuff with the help of Financial Freedom University, they had a constant nagging anxiety about their financial wellbeing – right now and in the future.

Am I doing the right things?

Am I going to have enough to be able to stop working one day? 

How do I know I’m not going to lose what I have? 

How do I know I won’t end up destitute one day? 

When we understand that we need just five pillars to create a super-solid financial foundation and generative ecosystem – and we do the work to put them in place – we can relax knowing our financial wellbeing is essentially guaranteed for life.

With this ecosystem supporting and serving you, you can feel supported by your money rather than stressed and enslaved by it. 

Pillar #2 is all about assets and understanding that…

Only assets create freedom!

Assets are things that can grow in value and / or earn you income without you having to be involved. 

The aim of the wealth game is to get in place assets that pay for your freedom lifestyle – the price tag of your FREAKY free life you identified in Pillar #1.

With assets paying for your life’s expenses, you have freedom.

You have freedom of choice. 

You have freedom to choose how to spend your life force and your time and who to spend it with.

This is what financial freedom is. 

This is my wish for you. Helping as many people achieve this IS my life’s mission.

Watch the video on Pillar #2 of the Five Pillars of Financial Resilience – Growing Your Assets.

Pillar #2 of your wealthy ecosystem is about making a disciplined, regular, consistent habit of investing into assets that will build up and grow to a point where they can pay for your lifestyle. 

► The first asset class is Stocks and Shares, also called Equities.

❝ Whoa, that sounds scary Ann! ❞

No it is not!

When you invest “in the stock market” you’re not actually investing in “the stock market” – the stock market is a place where you buy and sell shares in fabulous businesses.

With tiny amounts of money and an internet connection, you and I can own slices of businesses from all around the world. As shareholders, we get to benefit from the profits and growth of these businesses – without having to pitch up for a day’s work!

That is sexy, not scary.

When most people think about this investment class they think of movies like The Wolf of Wall Street and all that machismo.

That crazy gambling crap couldn’t be further from the truth of what successful stock market investing is all about. 

With a simple (boring) investment in an index tracker fund, you own companies from around the world, no matter where you are.

From your couch in Aberdeen, Addis Ababa, Acapulco, Adelaide, Albuquerque, Asheville, or Alberton, through a simple online digital investment platform, you can own the top companies in the USA, in the UK, in Australia, in China… hell, you can own all the top companies in the world.

You could be a shareholder in the FAANGs – an owner of Facebook, Amazon, Apple, Netflix, Google – and other success stories like Tesla, Microsoft and Visa. 

Simple (and sexy) investment products called index trackers cut out the middlemen (and all their costs) so that your money works for you and not for the financial industry. If you haven’t yet opened your digital investment platform and started your regular investing habit in index trackers learn, how in The Wealth Chef Book.

Building your asset base with stocks and shares is the easiest asset class when you’re starting with small amounts of money. From just £25, $40, R300 (or even less with robo-advisors and fractional shares) you can build up a great portfolio of stocks. 

I’m getting into some technical lingo, but the point I want you to get is that you need to get assets working for you if you ever want to be free. The stocks and shares asset class is much simpler to get involved in than most people think – especially with smaller amounts of money.

Getting Assets Working For You is Pillar #2 because YOU MUST NOT WAIT.

• Don’t want to wait until you’ve paid off your debt. 
• Don’t wait until you’ve got more money. 
• Don’t wait until the world seems a less crazy place.
• Don’t wait until your partner has their shizzle sorted.
• Don’t wait until your kids have left home.

Most Important News Alert
You must get assets working
in your life NOW.

You have to make getting assets in your life your highest priority because only assets can give you your freedom.

This asset class is also really simple to automate. You can do it tax-efficiently through tax-deferred accounts such as your retirement funding in a 401K, a pension, a superannuation and through tax protected investment accounts like an ISA, ROTH or TFSA.

► Your second asset class is what’s called tangible assets. Mostly this is real estate, also called investment property. 

A Big Wake-Up…

Your home is not an asset. 

WTF…?

Forget what the banks have told you. 

Forget that the financial industry has told you – that your home is your biggest investment.

That is a devastating lie.

Your home is NOT an investment, and it’s NOT an asset.

It’s a HUGE debt. 

It’s a big fat draining liability. 

I’m not saying “don’t have a home.” But don’t get caught by the illusion that owning a home makes you wealthy or secure.

What IS an asset in investment property?

It’s real estate that should increase in value and generates income. It could be residential, retail, industrial or commercial.

The point is, it’s physical property that you own that somebody else gets beneficial use of… and pays you for that use.

It is an asset working for you because it can grow in value and it can earn rental income for you. 

I love this asset class. In Financial Freedom University I often call it Wealth Play Dough because there are so many different strategies you can do with it. You can even make money with properties you don’t actually own – with strategies like rent-to-rent.

Investment property is also the easiest asset class to leverage. This is where you use expansion debt to accelerate your wealth creation. 

As long as your money is working at a rate higher than the cost of borrowing (the interest rate you are being charged), you can build your pile of assets faster.

You can also invest in this asset class through an index tracker product on your digital investment platform via a fund made up of things called Real Estate Investment Trusts (REITS).

And nowadays, thanks to technology and the internet, you can also own physical investment property through fractional ownership and crowd funding-based investment property platforms.

You can build a portfolio of investment properties around the world from your phone. You can be sitting in South Africa and own a medical building in the USA or a retirement home in the UK. This sort of direct international property investing was never available to everyday investors like us until the power of the internet and collaborative, syndicated investing democratised access. 

The point here is that you want to have different types of assets – both intangible assets, like shares in companies, and tangible assets, like investment properties – all working together for you.

Just like wealth is an ecosystem, so is a solid and safe asset portfolio.

It’s never one investment or one asset class that’s going to create your freedom. 

You must have a well-diversified and appropriate asset-allocated set of assets working for you. 

► The third asset class is made up of low input businesses. I hate the word “passive” businesses because, quite frankly, there isn’t such a thing. “Passive” implies there’s no leadership.

I call these “low input” because you are not involved in the value exchange of the business. You don’t have to be involved actively in order for the money to flow. Systems and processes and other people’s time and energy does that for you. You provide the leadership and direction for these systems to create the money. 

This is a huge asset class and includes things like royalties. If you take photographs and sell them over and over on a site like Shutterstock or Stock Photos you get paid over and over again for one photo. Music royalties and book royalties work the same way.

Digital courses that are delivered via the internet are also low input businesses, as are e-commerce businesses – whether they are direct shop fronts or Amazon wholesale businesses. 

Low input businesses can also be in the physical world. Things like vending machines, automated car washes, automated laundromats and privately owned ATMs are all low input businesses.

There are so many opportunities here, but the key thing is understanding that you can create multiple streams of income – and you need to create multiple streams of income. 

► The 4th asset class in Pillar #2 is ourselves. 

We are ultimately the greatest asset we have. 

First and foremost, for most of us, selling our skills is the first way we earn money.

We can exchange ourselves – we do the value exchange. 

It’s really important to not dismiss this.

There is a big movement in the personal development world that shames “work.” 

Rant Alert!

I believe it is an absolute privilege to be able to work, to be able to use my energy and creativity and knowledge to add value to others. 

There are millions and millions of people around the world who are desperate to be able to work. 

Desperate to feel they have value and can earn money in exchange for that value.

I am not saying work gives us worth. 

Everyone is already worthy beyond measure. 

There is nothing we need to do or say or create or “be” to be worthy of this thing called life which has already been given to each of us for free.

What I am saying is – as human beings, we need to produce and create; not being able to do so is devastating for millions and millions of people.

end of rant

I absolutely want you to get to the point where you have the choice to work actively or not… but while you are getting there – and even when you get to this magical financially free place – you must keep expanding you.

Are you making yourself more valuable to an employer, to your own business? 

When you know what you want and commit to your FREAKY FREEDOM TRUTH – and then focus on growing your asset base with these four assets classes – you are well on your way to experiencing real freedom.

But that alone isn’t enough – there are still three more pillars you need in your wealthy life ecosystem.

I would love to know how your wealth-building journey is going. On our the Facebook Community Page (which is free to join) please share with me:

• Do you already have assets working for you? 
• Are you investing consistently? 
• What asset classes do you feel comfortable investing in – and which scare the bejeebers out of you? 
• And if not, what do you believe is stopping you getting this pillar supporting you? 

Many people ask me, “Ann, when’s the best time to start investing?”

“20 years ago,” I say, but since we can’t go back in time…

Please don’t wait to get Pillar #2 solidly into your life.

Don’t get caught in the “when-then” trap.

Remember, assets create your freedom but they can only do that when you bring them into your life and get them working hard for you.

Big love

Ann