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If You Want to Be Wealthy, Use Your Time to Learn How to Buy (Real) Assets

by | Jul 3, 2023 | Money, Personal Finance

The day my parents couldn’t afford a $15 pizza is a day I’ll never forget.

I’d come home from school to learn a financial disaster had hit us hard. We lost our family home and got rid of many of our possessions. The new house was small. I had a closet as a bathroom.

It always stuck with me. I watched everyone else live in a normal house they owned. We rented a small house.

I was a joke amongst my friends.

Because we had no money we had to live far away. At the end of a kid’s birthday party, a pissed off parent always had to drive me home. They complained every time.

Why do you live so far away?

It was because we were poor. In my 20s, I decided this story wouldn’t define me. I’d learn how real money was made so I didn’t have to endure hardship ever again. It became an obsession.

Now I have a young daughter, nothing has changed.

Wealth accumulation happens slowly then fast, as long as you make the buying of assets one of your key financial goals.

Most people misunderstand what an asset is

The average person thinks a car is an asset.

And financial gurus are quick to slam them for this error. But a car can be an asset according to Rich Dad Poor Dad author Robert Kiyosaki.

For something to be an asset it has to generate an income. So a car by itself is a metal rust bucket. A car that is rented out and makes an income is an asset. As you can see the definition of an asset is misunderstood.

Common assets include businesses, stocks, and homes that are rented out.

The point of income is this…

It’s often thought that a paycheck is supposed to cover your bills.

An asset-minded person thinks differently. They use their income to buy assets that bring them more income. It’s a subtle shift.

In our 20s money should be used to buy experiences. Beyond 30 one of the key goals should be to use money to accumulate assets.

The reason for this is you stop trading time to get money when you have assets working for you.

Wealth is created by investing your money to buy time — Kenny | Accent Investing

Assets are little worker bees. They don’t get tired and they don’t need you to manage them or tell them what to do. Just buy them and get the hell out of their way.

The best use of money is to buy assets that buy you time.

An extreme asset-buying strategy

Assets generate an income.

The temptation is to use the cash to splurge and look rich. Again, Robert Kiyosaki taught me a powerful strategy:

The rich get richer by continually reinvesting asset profits back into assets.

When I learned this technique I started buying shares in the Nasdaq (the biggest U.S. tech stocks). This Exchange Traded Fund that I buy on my favorite investing app pays me dividends every 3 months.

I could take the dividend as cash. But then I’d pay tax and not maximize the assets I could buy. Instead, I use the dividend reinvestment feature.

It looks like this: every month some of my business’s profits are used to buy more shares in the Nasdaq — because I invest as a business, it’s more tax efficient.

When the dividends are due they are automatically invested into buying more shares of the Nasdaq. Those new shares then create more dividends that compound my money even harder.

That’s how money can create money on autopilot. The beauty is that with this strategy no money has to be cashed out, taxed, and then put back in. It all happens pre-tax, which means the money grows a lot faster.

Anyone can do this.

You might be thinking, “why tech stocks?” Simple. The AI revolution will change life as we know it and most haven’t realized it yet.

I don’t know which companies will win in this new world. So I invest in a collection of AI and tech stocks by buying the entire Nasdaq.

Own assets that accumulate in price and also pay income in the form of dividends that buy more assets on auto-pilot.

Wealthy people have a complicated list of tax deductions

The typical person’s tax return has a salary and 1–2 deductions, like a briefcase or bus pass.

Wealthy people have complicated tax returns. That’s why they have to pay more expensive accountants to add it all up.

When I had a job my tax return took minutes. Now it takes months. My income goes through a one-person business instead of my personal name. This means I can have lots of deductions depending on my scenario.

Things like travel, cars, dinners, furniture, computers, phones, etc, can all (potentially) become tax deductions. It lets you legitimately pay less tax and perhaps enjoy a better lifestyle.

You also have flexibility around when to pay tax which is the biggest benefit. Maybe you pay the most tax this year. Or maybe you wait until two years time to pay tax during a year when you’re not working.

There’s more you can do. And it can allow you to safely pay less tax.

Tax is our biggest expense in life — and most people forget that.

Wealthy people buy luxury items in an upside down way

The point of owning assets isn’t to look cool or brag.

It’s to eventually get money to buy things that improve your lifestyle. The traditional way to do this is to use hard labor, sweat, blood, and tears to purchase luxuries.

Wealthy people use the money from the money their money made them through ownership of assets to buy their material dreams.

This is the difference. It’s not that you shouldn’t own nice things. It’s that you shouldn’t trade your time to buy them, otherwise you’ll become a busy worker bee full of stress and no success.

The most satisfying income streams are generated through assets. Not labor — Kenny

What to do if you can’t afford to buy assets

Some of you reading this may be pissed.

Your financial situation doesn’t allow you to buy assets. Debt has taken over and you can’t magically become debt-free next week. I get it.

If you can’t afford to buy assets … then create assets.

  • A business is an asset. Create one.
  • A newsletter is an asset. Create one.
  • A book is an asset. Create one.
  • A farm is an asset. Create one.

The greatest opportunity right now is to create digital assets. This is how you get royalties and own intellectual property.

Maybe it’s a digital asset that teaches a skill. Maybe it’s a digital asset that brings people together in a community. Maybe it’s the digital asset of a social media account like LinkedIn.

Maybe it’s a website that’s full of affiliate links that generate passive income. Or a Youtube channel with paid sponsorships.

The only limit to digital asset creation is your mind.

Just follow the money

A friend of mine is homeless.

His dad is worth over $100M. There’s no chance he’s giving a dollar to his son. Still, he tells me a lot about his dad.

I ask him what assets his dad is buying. In 2019, it was commercial real estate in the middle of cities. In 2020, it was investments in medical companies. Over the last year it was copper.

Every year his dad is doing something interesting with assets. I’m not that smart so I just pay attention to what the smart money is doing.

I don’t copy their strategies, but I take note. You can too. Spend more time understanding the asset strategies of the wealthy.

Final Thought

The point of all this asset talk isn’t to get rich and buy a Porsche.

Nope. Wealth is different from the rich life because it’s based on freedom and owning your time. Wealth is a mindset. Wealth is a form of mindfulness.

When you understand how assets work, and use your money to buy them and make more money, the result is, you don’t need to think about money as much.

And thinking about money all the time is the real problem. Understanding how assets work is how you solve it.

This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.

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