Pillar 2: Growing Your Assets

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This is Pillar 2 of the mini series on the 5 Pillars of Financial Resilience.

If you haven’t yet watched the episode on Pillar #1, on 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 need to create financial security and real sustainable wealth. 

Having these in place enables us to stop stressing about money. No more waking up worrying how you are going to pay those bills? 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 The Wealth Chef book  and Financial Freedom University, they had a constant nagging anxiety about their financial wellbeing 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 there are just five pillars we need to create a super solid financial foundation and generative ecosystem, and then do the work to put these 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 stress 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 and 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. This is also called Equity.

👻 Whoa, that sounds so 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 market where you buy and sell shares in fabulous businesses all over the world.

With tiny amounts of money and an internet connection, you and I can own a slice of businesses around the world. We then get to benefit from the profit 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 US, 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 owning the Facebooks, Amazons and Apples and Netflix’s and Googles and Teslas of this world. 

Simple (and sexy) investment products called index trackers cut out the middle men and all their costs so money works for you and not 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.

In addition to The Wealth Chef book, I’ve got loads of other great resources for you to get going with. One is an ebook for you called Expand Your Dough so click on this link to get it now.

Building your asset base with stocks and shares is the easiest asset class to start 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 shares. 

I’m getting into some technical lingo, but the point that I want you to get is 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 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.

WT…. 🙀

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 into the illusion that owning a home makes you wealthy. 

What is an asset is investment property. 

It could be residential, retail, industrial, commercial…

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

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

I love this asset class and often call it Wealth Play Dough because there are so many different strategies you can doing with it. You can even make money with property you don’t even 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 of the borrowing), 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 in a fund made up of these things called Real Estate Investment Trusts (REITS). 

And now thanks to technology and the internet, you can also own investment property through syndicated or crowd funding based investment property platforms like Wealth Migrate. 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 US or a retirement home in the UK. This sort of direct international property investing was never available to every day investors like us until the power of the internet and collaborative, syndicated investing democratised the access. 

The point here is that you want to have different types of assets, both intangible, shares in companies, and tangible assets, investment properties, 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 appropriately asset allocated set of assets working hard for you. Check out this article on the Investment Pyramid to understand the principles of portfolio design and asset allocation. 

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 because passive implies there’s no leadership.

I call it “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’ve taken the photo once but get paid over and over again for its use. Music royalties and book royalties work the same way too.

Digital courses that are delivered via the internet are also low input businesses as are e-commerce businesses whether they are direct shopfronts or Amazon Wholesale businesses. 

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

There are so many opportunities here, but the key thing is understanding 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 earning money in exchange for that value.

I am not saying work gives us worth. 

Everyone of us is already worthy beyond measure. 

There is nothing we can do or say or create or be to be worthy of this thing called like which has already been given to each of us freely.

What I am saying is as human beings we need to produce and create and 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 are at 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.

Bit that alone isn’t enough, there are still three more Pillars you need in your wealthy life ecosystem.  

In the comments below I would love to know:

  • 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

P.S. I’m doing a free live New World of Wealth Virtual Workshop starting on November 23. The New World of Wealth workshop is a week of live online wealth trainings, community, and live Q&A with me (Ann Wilson a.k.a The Wealth Chef), jammed packed with the skills and knowledge to create the financial foundation and wealth you need to live your fabulously freaky authentic life.

If you haven’t yet secured your free spot, go here to let me know you want me to send you the join links for the live training sessions. The sessions will also be recorded so you don’t miss any of it.

 

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2 Comments

  • David Munyu says:

    very informative tx Ann

  • Rachel says:

    Hello Ann, thanks for this refresher. To let you know that I am on it, but I hit a bit of a wall as in my exuberance I transferred a large amount of cash to Easy Equities (over R100k) and was stopped in my tracks as I had told them I was unemployed (I am) and was unaware that that category means R20k max. Oops. I had to produce a few documents to show them I was not dealing in laundered cash, and now I think I am ok. So this journey has its cul de sacs if one is not properly informed. Yes, it is fun and easy to click along and get into the market, but beware of the traps…! (And BTW ETFSA is much easier to deal with than EE, there is a warm body [Khosi] who actually answers whatsapps…)
    The upside of my getting in on EE is that I have been told that I can move funds from my offshore bank account to the US-EE which will save me moving money here to move money there. I am getting returns from Wealth Migrate and they go into my offshore account. SO, now I have cash to move through to my US portfolio quarterly. Yaay!
    All this is thanks to you getting me into the swim. Thank you.

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