Someone has rightly said that if you take all the money from wealthy individuals like Adani, Ambani, and Bill Gates and distribute it equally among all people, eventually, in a few years, that money will return to their pockets. The main reason behind this is assets. This is why Robert Kiyosaki emphasizes that a person who has the skills to build assets and generate passive income is the one who achieves great wealth in life. The more passive income-generating assets you have, the richer you become. There are 15 types of assets that can make the rich even richer.
Cash The Most Useful Asset
The first asset is cash. The cash you have in your bank is earning you interest, even though it’s a different story that it may only be four or five percent, which is less than market inflation. Still, cash remains at the top for many people, companies, and investors. There was an article mentioning that a company like Reliance, which attracts investors just by its name, has ₹2.1 lakh crore in cash. The Tata Group maintains a cash reserve of ₹60,000 crore every year. Recently, in the news, Warren Buffett liquidated 50 percent of his holdings, and now he has $277 billion cash
.Wealthy individuals typically have two reasons for keeping cash. First, they believe the world is full of opportunities. Therefore, when a great investment knocks on their door, they want to be ready with cash on hand. Most people keep cash for this reason.
The second reason is to earn high interest. Having cash allows them to secure deals at the right time and best prices. Wealthy individuals often invest their cash at high interest rates, providing them with a steady annual income. That’s why it’s essential to be ready with cash when success comes knocking at your door.
2. Real Estate
Real estate is considered one of the biggest assets for two reasons. First, rental income. Many of us would prefer a fixed monthly income, especially when it doesn’t require working 8 to 9 hours, dealing with a boss, or facing the fear of being fired. All of this is possible through real estate. As technology changes, people’s needs are also evolving. Nowadays, people need not just homes but also studios, educational centers, PG accommodations, and even small business spaces. If you’re smart, you can invest in such properties and earn a decent monthly income.
The second advantage of real estate is appreciation. With the increasing global population, the real estate market is also expanding. The more people there are, the more homes are needed, and as demand rises, property prices are soaring. You may have seen in an Economic Times article that in 2023, property prices in Bengaluru increased by 10 to 15 percent, while in Delhi, they rose by 12 percent, in Mumbai by 10 percent, in Pune by 11 percent, and in Hyderabad by 13.5 percent annually. This highlights how valuable real estate is.
When it comes to real estate investment, here are a few options:
- Office buildings, where people work and pay you rent.
- Commercial buildings, where businesses sell their products and pay you rent.
- Land, where you can do farming, build schools or colleges, or even hold vacant land, which generally appreciates in value.
One important thing to remember is that the house you live in does not generate any income for you; instead, you incur expenses just to maintain it.
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3. Bonds
When the government or a business needs cash, they issue bonds to interested investors. In return for these bonds, the government or private companies promise their investors regular payments. Investing in bonds can be a super safe option for any investor because they are backed directly by the government. People who want a certain amount of money in the long term typically invest in bonds. You can start investing in bonds with amounts as low as ₹10,000. Government bonds usually provide a return of 6 to 8%, while private sector bonds offer returns of 8 to 12%, though they carry a bit more risk.
Government bonds often offer higher interest rates, and there are also several tax-saving bonds available, which provide tax benefits along with returns of around 5 to 6%
4. Stocks
Friends, with the rise of technology and development, India’s stock market has reached new heights. In this context, stocks can play a significant role in your financial future. Investing in stocks allows you to own a percentage of any publicly traded business, which means as the business grows, your investment also increases.
One of the benefits of investing in stocks is dividends. Companies often share a portion of their profits with stock investors, providing a great source of fixed income. For instance, there was an article mentioning that Warren Buffett receives $47 million in dividends every week.
Another advantage of stocks is stock appreciation. Investing in growing companies can significantly increase your investment in the stock market, as your initial investment of ₹10,000 can potentially grow to ₹1 lakh, ₹5 lakh, or even ₹50 lakh.
Asset Number 5: Mutual Funds and Index Funds
Index funds invest in the top 50 or top 30 companies of the country, such as the Sensex and Nifty 50, which are two major indexes in India. Everyone wants to grow their wealth, and investing in the best companies in the country is a great way to do that, making index funds an excellent option. People with a rich mindset understand that alongside their own efforts, leveraging the time and money of others can help them become wealthy.
This is why, through a monthly SIP (Systematic Investment Plan) in an index fund, you can invest a fixed amount and build a substantial corpus over time. For example, if your salary is ₹25,000 and you invest ₹1,000 per month with an expected return rate of 13%, if you continue this for 25 years, your total value will reach approximately ₹1 crore and ₹36,610.
6. Equipment
If you have equipment that can make others’ work easier, you can rent it out to create a source of passive income for yourself. For example, a DSLR camera that you don’t use, or a musical instrument that’s just lying around, can be rented out to a club or institute for monthly payments. Similarly, you can rent out an extra car or bike through platforms like Ola or Uber to earn a decent amount each month, all without much effort.
7. Patents
A patent is an underrated yet amazing asset. For those who may not know, whenever you invent something new or create a unique product, you can file a patent for it. A patent is a document that legally establishes you as the rightful inventor. If any company uses your invention or product, they must pay you for it, and if they don’t, you can take legal action against them. In the business world, patents play an incredibly important role.
For example, in 1995, Kailash Katkar developed a technology that worked as antivirus software called Quick Heal, which protected his computer system from viruses. Realizing the value of this technology, he decided to file a patent. When people started needing antivirus software, Quick Heal became the go-to name. Today, Quick Heal is a ₹2,000 crore (about $240 million) company. This example shows how valuable patents can be as an asset today.
8. Trademarks
Just as patents protect your inventions, trademarks protect your symbols, phrases, and signs. In today’s competitive world, the chances of scams and fraud have significantly increased. Therefore, it’s essential to properly use trademarks to protect our brands and logos. A prime example is Amul, known as “The Taste of India.” The Amul company has registered this trademark, which has contributed to its substantial financial growth. If any other brand tries to use the same catchphrase, they would have to pay Amul a hefty amount.
Similarly, the Tata Group has also registered trademarks for its logos, and they charge substantial licensing fees for their use.
9. Brand and Goodwill
Brand and goodwill are two distinct terms, but both are crucial assets for any business or individual. A brand name is created to leave an impression on customers, making them feel that they are using premium products. On the other hand, goodwill reflects how excited customers are about a particular brand. Branding is an effort that companies invest significant time and money into, while goodwill is a type of image that develops when customers are treated well.
The two are interconnected; there are many examples where strong goodwill has saved companies from brand corruption. Conversely, there are numerous companies that have thrived solely based on effective branding. Take MRF, for example. Fifteen years ago, it was not such a major brand, but today, one person is the face of MRF’s advertising and promotion, and that individual has transformed MRF’s reputation in the market over the past decade.
10. People
People are the biggest asset. Often, we fail to recognize the value of our employees and team members, and we only feel their absence when they leave. Remember, brand value and goodwill are tied to the company name, and while the company benefits from this, it’s the employees who create it. They are the ones who gather resources, test products, and launch them from day one. They drive the company’s success and help others become successful.
What do you think is the reason for the success of companies like Apple, Microsoft, Reliance, and Tata? It’s their employees and teams. No great leader has built their business alone; the reasons behind their success often lie in the great people around them. So, find the right individuals who can be valuable assets for you.
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