The Believers Guide to Building Wealth

From Chapter 4, Asset Management. After defining what money is, we can at least agree that money is a tool used to buy goods and services. Money is also a medium of exchange. The more of it we have, the greater purchasing power we have. We can also agree that what we do with our money is as important, if not more important, as how much of it we have. An asset is something owned that gives or creates value. It adds to your personal wellbeing, wealth, and net worth. A liability takes away from your wellbeing. As asset can be money, property, and income producing property, collectibles, investments, retirement accounts, bank accounts, life insurance policies, and some antiques. The items mentioned above are an asset as long as they produce equity and increasing value, or a future benefit. If they create decreasing value, they are a liability. The art of creating wealth depends upon how well you manage your assets or how well persons hired to manage your assets perform. At any rate, the management, how well you apply financially sound principles and professional guidance, of your assets is a skill that many folk are void of. Many folk will just put their money in the bank and let it sit. Some will have valuables that are never insured or registered and will just exist without any knowledge of there value. Management of your assets is a long and meticulous process that may take a lifetime. Periodic evaluation and inventory of what you own can be troublesome, but necessary if you are going to achieve a specific financial goal. Managing your assets must begin with clearly defined goals you want to achieve with doable time lines. One of the first obstacles you have to overcome is to recognize you do have assets. The simplest equation in this recognition is that of income. Income is a tangible asset. Even at this level, it has been my experience that folk do not know what that earning power entails because they do not have a system that analyzes what they earn and what they spend.