Income Producing Assets

As I have already written in my many of the previous articles that, Rich people spend their lives in acquiring assets while poor and middle class people acquire liabilities. Now, What it means by Asset? – Well Asset means anything which is likely to appreciate in future and put money in your pocket.

Now, Assets provide you money in 2 basic ways

01) Capital Gains &
02) Cashflow (Income Producing Assets).

Cashflow producing Assets means Income Producing Assets. While Capital Gains means you buy asset at low price and sell them at higher price in the future and the difference between 2 prices is known as capital gains.

Now, Income Producing Assets (Cashflow Assets) are not only Income producing assets in the true sense. They also provide you Capital Gains also. So Income producing assets provide you both the Capital Gains + Cashflow.

Examples of Capital Gains -

- Mutual Funds
- Stocks
- Bonds
- Gold
- Art
- Antiques, Rare Coins, Paintings, Old Wines, Vintage Cars…etc…

Example of Income producing Assets -

- Private Businesses
- Dividend paying Stocks
- Income producing Mutual Funds
- Rental Properties
- Blogs, Forums, Websites or any other web properties
- Royalties & Copyright…etc…

Now, as a Rule - “Rich people invest in Cashflow (Income Producing) Assets while Everyone else invest for Capital Gains”.

The main reason why Smart people invest in Cashflow Assets is because as long as you hold it, you will get a handsome, steady income that you can N’joy. But most of the people in this world invest only for capital gains because they want huge profit and second thing is that, it is it is difficult to find Cashflow assets in the market. It is difficult to develop cash flow assets in the economy.

Say for Example, Take the Example of this Blog. This Blog is my Cashflow Asset. I am working on this blog for more than one and a half years. And it took more than a year to convert this blog into an income producing asset. I have to work 5 hours a day behind this blog to grow it. So developing Cashflow Asset is very hard.  But It’s Worth it….!!!!

Once you own at least one Cashflow Asset, You can acquire N Number of Assets out of the Income from that Asset.

So focus your mind in acquiring cashflow assets…!!!!