It has contributed to extensive impacts in healthcare, financial losses in national and international business, and a worldwide economic downturn. The current widespread and unprecedented economic distress has many Americans seeking ways to further increase their financial stability and future security. Aside from exploring new business ventures, many Americans have begun investing in more assets to contribute to their overall long-term wealth. In this article, we will discuss what an asset is, different types of assets, and how investing in assets can help prepare you for financial freedom.
An asset is anything that can be owned or controlled by a person or entity to produce positive economic value. There are two main types of assets: personal and business. For this article we will focus on personal assets. Personal assets are items of value that belong to a specific individual. Some of the prominent categories of personal assets are cash or cash equivalents, real estate, personal property, and investment accounts. Within these categories personal assets can include but are not limited to physical cash, checking and savings accounts, money market accounts, certificates of deposit (CD), real property, land, boats, jewelry, vehicles, annuities, bonds, cash value of life insurance, retirement plans, mutual funds, and stocks.
Here at Dynamic Property Partners, we believe the most standout tool is investing in real property. It’s one of the easiest and safest ways to increase your wealth and contribute to your own financial freedom. By investing in real estate, you are investing in a tangible asset, which will provide excellent leverage, high cash yield, equity buildup, and tax advantages. There are also various ways to invest in real estate which include but are not limited to house hacking, fix and flipping, wholesaling, long-term rentals, short-term rentals, and private money lending.
The benefits to owning personal assets are endless. In addition to contributing to your overall net worth, assets can also generate passive income in the form of interest or dividend payments, provide a hedge against inflation, and can be liquidated for the cash equivalent. Additionally, if you are in the market to a apply for a loan of any sort, your assets and their value can give you leverage by helping you appear less risky to your lenders. If you are interested in applying for a home loan, specifically for a renovation project, you can also use your assets as collateral to better qualify for a secured loan. By proving to the lender that you have liquid assets or cash reserves, you are given the upper hand as lenders see you more as a healthier investment.
As you can see, there are many ways to invest in assets to protect your financial future. By attaining assets, you can grow your wealth, while protecting yourself from economic downturns. It is most important, however, to ensure you have a diversified portfolio as the markets are always changing. One of the best ways to ensure your portfolio diversity is by adding assets that provide passive income. Stay tuned for our next investing blog where we will discuss a program in which we offer investors an excellent way to increase their passive income!