15 Things That Make Up the Portfolio of Most Rich Individuals

This article is not about how to make money. Instead, what you do with money coming in to fortify your wealth. 

If you're new to these terminologies, you need to learn the difference between Assets and the liabilities.

°°°Asset puts more money in your pocket°°°Liability costs you money

The more Asset you have making money for you, the richer you are. Simple!

So, here are 15 Assets that are making the rich even richer.

(1) Cash

Cash in a  bank deposit is earning you interest. The downside is the interest paid up by banks these days isn't even keeping up with inflation, but cash is still a priority. 
Apple, the company has over $200b in cash reserve, that's liquidity.
So why do rich people put such a huge portion of their wealth in cash reserve?

°°° Being able to access any opportunity that presents itself which is pretty self explanatory if you think about it.The deal of your dream is in front of you and you don't have the money to take advantage of it. This is one of the main reasons why rich people save cash.°°°Because they can get higher returns straight from cash deals. Not only to people who offer better pricing from cash, but you can also lend money with high interest. This practice is called pair to pair lending.

(2). Real Estate

This is a big one. Here are the reasons:
°°°Rent- money is coming in every single month with a minimum amount of work. If you are a bit smarter, you can take advantage of the technology improvement happening right now, and instead of traditional rent, do show your rent for higher yields, but it isn't dispersive.

°°° Appreciation- population numbers are going up and more and more people need to pay to live a rent.The demand increase and so prices of properties are constantly going up and they'll forever will.
In terms of real estate asset, you have:
(i) Residential buildings: people live in your property and pay you rent
(ii) Commercial buildings: businesses use your space to sell stuff and pay you rent
(iii) Office buildings: People work in your property and pay you rent
(iv) Land: which can be cultivated, developed or even left for appreciation.

Super important: the house you live in isn't an asset, it's a liability. It costs you money to live in it while it isn't putting any nee money in your pocket.

(3). Bonds

When government or business might be in need of cash, they can issue out something called "bond" which get sold to the interested investors.
Through these bonds, the government or business vows to pay the person buying the bond a certain amount of money every month.

This is a super safe investment because they are mostly backed by the government, but as you probably know by now, low risk in business translate to low reward as well.
Bonds are usually in the 3% yearly return rate which is better than what most banks offer.

When the bond reaches it end, the principal amount is returned to the investor.
The main way people buy bonds are :
*Directory from the treasury department*Through a brokerage firm.

(4). Stocks

Stocks are not as complicated as those well strict firms make you to believe.

Stocks are an easy way for you to own a percentage of a publicly traded business. If a business issues 10m shares and you own 1m of those shares, you are a 10% owner in the business. 

This incredible breakthrough and finantial instrument has allowed the average person to own a stake in some of the companies of our day.

(5). Mutual and Index Fund

If stocks allow you to purchase shares in one company, mutual funds and index funds bring in multiple companies together so you're buying into the entire basket of companies as a whole.
Why is this better?

Basically, you're more diversified, so with a safer investment to make. Statistically, index funds are the best performing asset class.If you want to know the in-depth of this, I recommend you to read “Money master the game" by Tony Robbins.

(6) Equipment

Anything that generates money for you or helps you make money faster is considered an asset. If you are a farmer, the tractor is an asset. If you are a programmer, the laptop is an asset. If you are an UBER driver, your car is an asset. Whether or not something is an asset or liability, change is depending on if it had a direct correlation to the money you're generating.

Unless your income is depending on the car, buying one counts as a liability. It is very often that people confuse the two, then try to justify it as an asset when in reality, they are mismanaging their own finances due to their lack of self control.

You don't need the most expensive laptop to watch YouTube video.

(7) Patents

Patents are awesome. When you invent something new, you can prevent your invention by filing a patent.

It is a document that certifies Inventors and describes in details what your invention does. With this protection in place, companies have to pay money in other to use your innovation.

If they don't, you got to sue them .
Patents are incredibly powerf and valuable in the business world. A single patent can make you rich and all the best inventions are backed by patent.

(8) Trademarks

If patents protect your invention, trademarks prevents your symbols, words and phrases. 
It is pretty obvious why this is a big deal when it comes to the logo or the name of a brand.
But here is where things get super interesting:

If you are a owner of a valuable trademark that has a marketable value, you can license it to people for commercial purposes and they pay you in return.

(9). Brand and Goodwill

There are several differences between Brand and Goodwill that build that super valuable to any business.

A brand is the footprint a company lists in the mind of a consumer, what they stand for and what they present themselves as being.

Goodwill is the emotional affection people have toward your brand 
A brand is owned. It is an effort a company is making to pursue a particular image of itself into the marketplace

Goodwill comes from the way a company treats it customers, the positive impact it has on the community and how greatful people are that the company exists.

Goodwill is super hard to cultivate or scale, but people will literally save companies from bankruptcy because of the goodwill they have for it.
There are companies who became incredibly successful just through branding alone.

(10). People

You don't realize just how valuable and asset people are until they leave. Very few people understand that companies aren't actually real.  

Companies are the infringment of our imagination, validated by the state. Companies are names, ideas and innovation happening on today's imaginary umbrella.

And who came up with all of these?
It's the people. A single person can shift the company with their idea .
There have been cases when bigger companies have acquired  start-ups  just to bring those people in. There is actually a term for it, it's called “acquire".

Ideally, nobody in your company should be irreplaceable but the harder to replace some people are, the more valuable of an asset they are to you.
So make sure that you know they are appreciated. Hire the right people and they'll make you rich.

(11). Raw materials and commodities

The price of raw materials fluctuates and varies depending on the market. If you're smart about it, you'll buy it when it is cheap, hold it and sell it when it is in high demand.

This applies to everything in life from currency, to gold, to oil, to crypto, to luxury cars and art.Over the past 15 years, the price of Gold has increased by 278%.“Never invest in things you don't understand".

(12). Book, songs, digital courses, information or content.

Information is an incredible thing to be selling because it is infinitely scalable. You write a book once and you can sell it a million times. Same goes for digital course, song, or any other type of digital product.
Creating and distributing such an asset  increases not only the value of the business, but can make you very rich.

The moment your product is done, your job is to promote it and get it in the hands of as many people as you can.

 With music, it's even more interesting. Why? Because you only have to get it right once and you can literally sell for life.

(13). Royalties

The simplest way to put it is, you write a book, that's great. A movie studio wants to buy the right to use your book and make TV show out of it and in exchange, you're getting a portion of the money generated.

Royalties apply to everything that has to do with you intellectual property.

(14). First mover advantage and proprietary business model

Whenever you innovate in a commercial manner, this innovation is regarded as an asset. 

The Apps store bought by Apple is one of those innovations. The micro transaction and games are a mover business model.

(15). The Time-money-Time Arbitrage

Use your time to generate money, then use the money to buy other people's time. That's how you exponentially grow time working for you.
I know this might sound confusing.

Basically, your job is to identify opportunities where you can convert time into money. You do that for sometime until you have enough to bring in another person.

Because you've generated this opportunity, you can pay this person less than the money you're earning. This is a fundamental business lesson. It's the reason why every single company has employee.

Every single person in an organisation is generating more value for the company than they are being paid by the company, and the company is keeping the difference. This is called profit.
This profit is the reward of solving the Time-money-Time Arbitrage problem.

If you are new to business,walk your ass trading your own time for money and then figure out how you can use this Arbitrage to build a real business.Every business owner out there understands this methodology but very few other people know about this because they are never thinking like a business owner does.

As a skillbreeder, your job is to figure out a way to take advantage of any of the assets mentioned in this article and secure a bag for yourself.

Now that you do, will you look for a way to find out what you're going to do with it?

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