Oct 5, 2023
Rethinking What is an Asset
AZ TRT S04 EP39 (202) 10-1-2023
What We Learned This Week:
Knowledge as an Asset
Industry You Work in as an Asset
Your Network as an Asset
Leverage as an Asset
Focus as an Asset
Traditional Investment Assets – Appreciating vs Harvesting
Notes:
Asset - a useful or valuable thing, person, or quality.
Knowledge as an Asset
Having a particular skill, and knowing how to solve unique and hard problems can be invaluable. If you’re an employee or a consultant, you could charge more for your services.
Likewise, if you are well-versed in your industry and you know the right contacts on how to solve problems this can also be very valuable. Your knowledge and expertise creates value. Tony Robbins quote – ‘You get paid for the value you provide.’
If people see you as someone with the answers then you are now in demand. You become the trusted advisor in the net work, your status is raised, and hence you can charge more. The knowledge could be of key contacts, can be information, or key expertise. Bottom line, if you solve people’s problems, you become very valuable to them.
The Industry you Work In as an Asset
Is the industry you are in, ascending or descending? Technology has been called deflationary because over the last 40 years it has gone up, from income, to salaries, and to stock prices. By contrast if you were a worker on a manufacturing line you have likely been replaced by automation and robots.
If you have chosen a career in a growing industry, rising tide raises all boats. You could have great success and opportunities for promotion because the industry is ‘on fire’.
When choosing careers, you look for industries are trending up
Your Network as an Asset
The old adage - your network is your net worth. Knowing the right people and having good contacts can be a game changer in almost any industry.
‘You are the average of the five people you spend the most time with’. – Jim Rohm
This could be a good mentor or a coach helping your career. This could be a manager or boss who champions you and helps you advancing your career. This could be good professional contacts that help refer business, or can provide funding.
Also, your advisory group who helps you with key decisions and business ideas. You want to be the dumbest person in a room. If you associate with successful people then you have the potential to be successful. Again, rising tide raises all boats.
Leverage as an Asset
If you know how to use leverage - to get more done with less, this can be very valuable. If you can get more done in less time, or outsized returns with less resources this helps to scale wealth and businesses over time.
An example of this is using technology to leverage your time, your schedule, and your output. Numerous apps and software programs can save people hours per week and lots of time over 1 year to 5 years.
Leverage could come in the form of a business loan used to grow your business faster to make better returns. Leverage could be an example of either employees work for you or a virtual assistant who helps save you time so you can focus on your core job.
Focus as an Asset
Understanding what you are good at, and what your skills can give it the most value.
Understanding what industry you are in and how you can help people. Focusing on these core skills, doing only a few things, but you do them very well. It’s this focus, and being the best with one thing can be quite valuable.
Diversifying too much in your career can be unfocused, and scattered. Typically if someone needs help they want to hire the best person for the job. Someone who is an expert in that particular field, that they need help.
Bonus - Traditional Investment Assets
How to evaluate, and value investable assets.
Clip from:
Assets – Appreciating vs. Harvesting
- BRT S03 EP26 (125) 6-17-2022 – Wealth for Life
Things We Learned This Week
- Appreciating Asset – buy low, sell high, buy an asset and hope it goes up in value – ie Stocks,, Gold, Art, Real Estate, Crypto
- Harvesting Assets – Assets that give off income, or cash flow - ie Real Estate rental property, owning a business, dividend stocks, REITs, etc.
- Stock market is not Efficient at capturing gains, have to sell at the right time to gain the value of the asset – harvesting Assets can also appreciate while giving off income
- Assets act as a hedge vs. inflation - money sitting in cash, loses value to inflation, purchase an asset that goes up in value more than inflation.
- Past – people had pensions, savings, & social security to rely on, today have to create your own retirement plan – use Tax Buckets and move money into a long term Tax Free position
Co-Host: Denver Nowicz, President - Wealth For Life
https://wealthforlife.net/brt/
https://twitter.com/denvernowicz
Denver is an advisor with nearly 20 years experience working with clients in investments and insurance, designing retirement plans with a combo of both. He takes us through different strategies for clients to get the best allocations for their money over the long term. It is the Combo Strategy of both Offense and Defense, the synergy of the mix, not ‘All or Nothing’.
Assets – Appreciating vs. Harvesting
Assets: Appreciating vs. Harvesting
There are many different Assets you can invest in. Common asset classes are Stocks, Bonds, Gold & Real Estate. There are Alternative assets like Crypto, Art, Private Equity, etc.
The
classic idea is you buy an asset as an investment with
the idea it will appreciate over time so it is worth more when you
sell it. Buy low, sell
high.
It
also may act as a hedge vs inflation. Instead
of having your money sit in cash, and lose money
to inflation, you purchase an asset that goes up in
value more than inflation.
What
is rarely discussed is the concept of Appreciating
Assets vs. Harvesting Assets. What's the
difference?
Appreciating
Assets are
the assets mentioned above, where the plan is to buy low, wait for
the appreciation, then sell high. You do not capture the gains
until you sell. You gain value on paper, but if you wait too long
to sell, you could miss the appreciation. Likewise if they lose
value but you do not sell, then only a paper
loss.
Stocks
are a classic example. 'If I just sold last month, I would have
made 25%, instead of 15%.' You have to time it
right.
Other
examples are Gold, Art, most Crypto, certain types of Real Estate
(Land for example with nothing build on it
yet).
These
assets are only valuable when they appreciate, and
if you sell at the right
time.
Harvesting
Assets are
assets that get interest, or give off profits, or cash
flow.
You
are able to capture some of the
gains from the asset.
Examples
are:
- Rental Real Estate - get rental income, plus expense write offs, plus depreciation ***
- Bonds - collect interest during the term, and receive the full value if held the entire term ***
- Dividend Stocks - receive payments quarterly from the co. ***
- REITs - pays out 90% of income as dividends to investors ***
- Crypto that is Staked - receive interest payments while staking ***
- Covered Call Options - collecting premium on stocks you own, by renting them out ***
- Business - that is profitable, and gives off cash flow
- Index Life Insurance - receive credited interest during the term
***
Asset value can go up or down in the holding
period
In
fact many of the above Harvesting examples can all be both
Appreciating and Harvesting Assets:
Rental
Real Estate, Bonds, Dividend Stocks, REITs, Cash Flowing Business,
Index life Insurance, etc.
Full Show: HERE
More Info on WFL and Tax Free Matching: HERE
Wealth For Life Topic: HERE
Link to Taxes Show on 10/31/2021 w/ Denver: Here
Link to Offense / Defense Show on 6/6/2021 w/ Denver: Here
Link to Shows, Denver was a Guest: Here
Investing Topic: https://brt-show.libsyn.com/category/investing
‘Best Of’ Topic: https://brt-show.libsyn.com/category/Best+of+BRT
Thanks for Listening.
Please Subscribe to the BRT Podcast.
AZ Tech Roundtable 2.0 with Matt Battaglia
The show where Entrepreneurs, Top Executives, Founders, and Investors come to share insights about the future of business.
AZ TRT 2.0 looks at the new trends in business, & how classic industries are evolving.
Common Topics Discussed: Startups, Founders, Funds & Venture Capital, Business, Entrepreneurship, Biotech, Blockchain / Crypto, Executive Comp, Investing, Stocks, Real Estate + Alternative Investments, and more…
AZ TRT Podcast Home Page: http://aztrtshow.com/
‘Best Of’ AZ TRT Podcast: Click Here
Podcast on Google: Click Here
Podcast on Spotify: Click Here
More Info: https://www.economicknight.com/azpodcast/
KFNX Info: https://1100kfnx.com/weekend-featured-shows/
Disclaimer: The views and opinions expressed in this program are those of the Hosts, Guests and Speakers, and do not necessarily reflect the views or positions of any entities they represent (or affiliates, members, managers, employees or partners), or any Station, Podcast Platform, Website or Social Media that this show may air on. All information provided is for educational and entertainment purposes. Nothing said on this program should be considered advice or recommendations in: business, legal, real estate, crypto, tax accounting, investment, etc. Always seek the advice of a professional in all business ventures, including but not limited to: investments, tax, loans, legal, accounting, real estate, crypto, contracts, sales, marketing, other business arrangements, etc.