What’s the key to increasing the portfolio of assets? Paying yourself first i.e. saving is important way that most of us increase the number of assets that we own.
Create a budget based on which you make regular payments to yourself and create a reserve using which to make future investments in productive assets.
Remember that your home and your car are not real assets since they do not create an income stream for you. So key to becoming rich is creating more Productive Financial Assets
Productive Financial Assets
Stock market investments – they give a return in terms of dividends and capital gains. You need to look at the ROE stocks and past history of the share price. Also please review the management of the company if they have a good track record. Look at the demand and supply conditions that the company operates in and vulnerabilities of the industry – these will give a good insight into which direction the company will move. Once you have gained enough experience in picking stocks – speculating in stocks based on analysis of demand and supply trend of speculative stocks such as charting can also lead to significant capital gains.
Government Bonds and corporate bonds – there return comes in terms mainly in interest costs however speculative investment in some corporate bonds can result in significant gains. Buying junk corporate bonds for speculative purposes can yield huge returns.
Forex investments – is another type of speculative investment that can lead to significant gains. Considerable experience and skill is required to navigate the forex markets profitably.
Venture capital investments – investing in new businesses can lead to high returns. Especially tech start ups can provide a very good returns through a successful IPO. Key here is to get in early at a low investment cost when the company is at the start up stage.
Complex financial instruments – Other types of complex financial assets are available for investment however investment in these financial instruments could lead to significant losses – so seek professional financial advice before investing or prospecting in these type of investments
Some high net worth individuals invest in assets that provide a hedge against inflation.
Precious stones and precious metals – are a favourite hedge against uncertain financial markets and successful speculation in these markets have been known to lead to high returns especially over the long run.
Stamps and Numismatics – another favourite of collectors who spend a lot of time building up a portfolio of assets that can be later resold at very high prices
Collectibles and memorabilia – has a considerable value in terms of generating a return in the long run and is mostly indulged in by those who have a close personal interest in the specialty. This is the type of interest that can be converted into a successful part time business. Take a look at ebay will give a rough idea of the size of the market for collectibles.
Works of art are another favourite of high net worth individuals to invest as a hedge against erosion in value and also make a large capital gain over the long run