4 Kinds of Assets That Generate Income and Make You Rich

Vahid Chaychi

3 years ago

An asset is any resource or property that has economic value and can be owned or controlled by an individual, organization, or government. Examples of assets include physical property, such as real estate or machinery, financial assets such as stocks and bonds, and intangible assets such as patents, trademarks, and goodwill.

Assets are often categorized based on their liquidity, or how easily they can be converted into cash. Highly liquid assets, such as cash and short-term investments, can be quickly converted into cash, while less liquid assets, such as real estate, may take longer to sell and convert into cash.

Assets can be used to generate income, either through appreciation in value or through the collection of rent, interest, dividends, or other forms of income. They can also be used as collateral for loans or as a source of financing for new investments or projects.

Learn more here: What Are Real Assets? How Can You Get Real Assets and Avoid Fake Ones?

4 Kinds of Assets That Generate Income and Make You Rich

Businesses
Real Estate
Commodities
Paper

1. Businesses

There are two kinds of businesses: Brick-and-mortar and Online

But I know day-trading as a business too because it is what you do every day and you don’t hold your positions for more than a day. We will talk about it later. But you all know what brick-and-mortar businesses are. I have talked about their success rates and risks here: Why You Should Not Run a Small Business Unless You Have To

In that article I have explained that running a coffee-shop costs $80,000 to $250,000 plus so many other things that you must do, while your success rate is still too low. This makes some people think about franchise businesses like McDonald’s or Starbucks because they think they have a higher success rate. It is a huge mistake, although according to a report by the International Franchise Association, the success rate of franchise businesses is higher than non-franchise businesses. The report found that after five years in business, 91% of franchise businesses were still operating, compared to 47% of non-franchise businesses. That’s a lot better, but do you know how much it costs to start a McDonald’s outlet?

According to McDonald’s, the estimated total investment required to open a new franchise location ranges from $1 million to $2.3 million. This includes expenses such as:

The initial franchise fee, which ranges from $45,000 to $60,000
Costs associated with building and equipping the restaurant, including land, construction, equipment, and signage
Inventory and supplies needed to run the restaurant
Training expenses for employees
Other expenses such as insurance, permits, and legal fees

In addition to the initial investment, ongoing costs of running a McDonald’s outlet include rent or mortgage payments, payroll expenses, marketing expenses, food and supply costs, utilities, and maintenance expenses. It’s important to note that actual costs may vary depending on a variety of factors, and franchisees are responsible for managing their own operations and finances.

So, this is not everyone’s bread and butter.

Online businesses, although they can be started even with less than $100, they need lots of knowledge and experience, while they have a very low success rate too, mainly because of competition that is going higher and higher every day. I won’t go into details, not to make this article too long.

2. Real Estate

I like this one much more than brick-and-mortar and online businesses because if you do it correctly, you will have a much better success rate, but with brick-and-mortar and online businesses, even if you do them 100% correctly, you will have a very low success rate.

In the real estate market, you can buy and rent residential and commercial properties. While their value will hopefully go up, you make money through renting them. This is how an asset has to be.

You can also buy, demolish or flip and sell. If you are a builder yourself, then you will save lots of money and so your profit will be much higher. But if you are not, you can still make a profit if you choose the area and properties correctly.

There’s only one problem that makes me say this is not everybody bread and butter here too: It is the budget you need to have to develop a cash flow from the real estate market:

Assuming an average rental yield of 4%, which is the annual rental income as a percentage of the property value, a landlord would need a real estate portfolio worth approximately $3,000,000 to generate $10,000 per month in rental income, in New York city. So, it needs a lot of money to make only $10,000 per month.

3. Commodities

Commodities include metals like gold and silver, and things like oil that you can trade online. The price of gold can fluctuate significantly over short periods due to changes in market conditions, investor sentiment, and other factors. However, over the long term, gold has historically been seen as a store of value and a hedge against inflation, which has helped to support its price appreciation over time. The price of gold has increased significantly over the past 30 years. In 1991, the price of gold was around $360 per ounce, and as of May 2021, the price of gold is around $1,800 per ounce and is $2,041 in 2023. This represents an increase of more than 560% over the past 30 years.

4. Paper

Stocks
Bonds
Mutual funds

In the case of gold, we know that we must buy gold. But in the case of stocks, bonds, and mutual funds, which one should you buy?

Here is where most people lose a lot, unless they have the intelligence and knowledge of Warren Buffett who knows what to buy and how long to hold. I don’t know about you, but I don’t have that knowledge, intelligence and experience. That’s why I do day-trading. I don’t buy and hold. I have never done it.

Only Your Assets Make You Rich

In spite of all the problems I mentioned, it is still assets that can make you rich or at least financially free. First, you must establish at least one good and strong source of income that is also scalable, which means you can increase the income if you want. Then you should spend a portion of your income on your expenses. But, you should save a bigger portion of it, and use another portion of it to buy or develop assets. This is how you will become financially free or maybe even rich, over time, and slowly but surely. There is no other way to achieve this, if you want to achieve it legitimately.

Is it easy? No!

Can everyone do it? Unfortunately not.

Is everyone lucky enough to succeed in this long journey? No!

A Good Solution

There is still a good solution for those who cannot do this alone and on their own. In LuckScout, we establish active and passive sources of income for our members. We work hard to increase their active and passive income. Not only do we add more sources of income to the community, but also we use the power of compound interest to help our loyal and active members to have more shares from our profits. How much will these cost our members?

They don’t pay a dime, nor do they have to invest and risk any money. We do these 100% for free because we want to have a community of happy, healthy and wealthy people to help humanity.

The sad thing is, unlike Ponzi schemes that accept an unlimited number of members because they take money from new members to pay their old members who are waiting to get paid, we have limited capacity and we will stop accepting new members when we reach our limits. So, join now and bring those you like them to be in this community too. Your activities will make the LuckScout engine work for you harder.

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