How to Build Assets & Get Stupid Rich (Or How to Not Retire Poor) 

And I'd like to share that knowledge with you today so you can start building wealth and feel what it's like to no longer be a slave to a paycheck.

Here is how to build assets & get stupid rich (or at least how to not retire poor):

What is an Asset?

Already have a full understanding of assets and just want the juicy stuff? Click here to skip ahead.

Before I can teach you how to build assets, you first need to understand what they are. Many people THINK they understand assets — most are wrong.

An asset is anything you invest money into that gives you money back in return.

Earning money back on your investments in this way is called a positive Return on Investment (ROI).

For example, if I purchase a rental property and rent it out, I now own an income generating asset because my tenants are paying me more money in rent than I'm paying out on the property loan (hopefully).

Of course, not all assets are created equal. Some yield a very high ROI (for the sake of argument let's call anything over 10% a "high ROI"), some yield a low ROI (say 4%), and some may not yield an ROI or have a negative ROI (such as a rental property with no tenant, where you're losing money).

Anything you purchase that COSTS you money, rather than GAINS you money, is a liability. This is the opposite of an asset. Let's take a look at what that means:

What Common "Investments" are NOT Assets?

You may have heard that your house or your car is an "investment". While you can use your imagination to think of them as an investment — they do provide you with a safe place to sleep and a way to transport yourself — they are NOT assets.

When you purchased a house, you probably took out a mortgage. That mortgage has an interest rate. The interest rates on home loans is usually between 3 and 7%.

So if you buy a home for $100,000 on a 30-year loan, you'll end up paying $152,777.45. And that's on the lowest possible interest rate! At 7% you'll pay $240,508.90!

Meaning, if you buy a house, you LOSE tens, if not hundreds of thousands of dollars over the course of the loan. And that's not including utilities, repairs, upgrades, taxes, and seller fees if you decide to sell!

Oh, and did I mention that average inflation rate of 2% per year which means you have to earn at least 2% just to break even? (Read more about that here.)

This is a liability, NOT an asset. Of course they don't teach you that in college.

The only way a home or a car or anything else becomes an asset is if you can earn more from it than you spent on it. This means you could luck out and your house's value could go up enough over time to cover your interest or it could mean you make improvements that up the value.

But ultimately, unless you're extremely lucky or spent a lot of time researching up-and-coming neighborhoods to purchase your home, it is NOT an asset. Nor is your car (unless it's a Tesla with autopilot on the upcoming robo-taxi network).

11 Income Generating Assets to Invest In

Now that you understand what true income generating assets are, it's time to get started building assets! I've split this list into three areas:

• "Safe" Income Producing Assets
• "Risky" Income Producing Assets
• "Speculative" Assets

Let's dive in.

"Safe" Income Producing Assets

There are three assets considered to be "safe". Meaning, it's very unlikely you will lose money on any of these investments. Of course, no matter how safe an investment is, there is ALWAYS a risk.

Now that that's out of the way, let's get to it:

Asset #1: Certificates of Deposit (CD’s)

Certificates of Deposit, or CDs, are basically you giving the bank a loan with interest over a set period of time (known as a "term length").

Most term lengths are between three months and five years. During this time, you can't take your money back without a penalty. However, you're guaranteed to get the agreed upon return.

The longer your term length, the more money you typically make.

However, CDs do come with a few drawbacks:

• Inflation: The average inflation rate in the U.S. over the past 60 years is 3.7%. And since the Fed printed over 30% of the U.S. money supply in the last year alone, inflation is likely going to skyrocket. Most CDs only offer a 0.5% to 3% return rate, which means you're more likely to lose money than gain it.
• Market Crash: The major risk here is a market crash like the Great Depression, which I believe is a very real possibility in the coming months or years. If the banks go kaput, you lose all your money.
• Money Tied Up: Because you can't touch your money for up to 5 years, you can't do anything with it. That's great if you're just looking to make a small, (probably) guaranteed return, but it also means you can't put your money into any other investments or use it at all for that time.

Overall, they are a no from me. But I am not your financial advisor and you need to make decisions based on what's right for YOUR personal situation.

Asset #2: Bonds

Bonds are just like CDs, except instead of lending money to a bank, you're lending it to the government. And like CDs, they are:

• Guaranteed Returns: Assuming the government doesn't collapse, you'll get your money back.
• Very Stable: You know exactly how much money you will get and when.
• Very Low Returns: Like CDs, you may not even be able to keep up with inflation and your money is tied up for a long time.

If you want a low-risk investment that you don't have to think about at all, bonds may be for you. Not for me, but maybe for you.

Asset #3: Real Estate Investment Trusts (REITs)

REITs were invented by the U.S. Congress in 1960 to give people the ability to invest in income producing real estate.

REITs are similar to a Mutual Fund but for Real Estate. They’re a collection of properties operated by a company (aka a trust) that uses money from investors to buy and develop real estate.

When you think of rich people, you probably think of real estate. After all, real estate investment appreciation accounts for the highest number of millionaires out of any investment in the world!

But if you think it's just a matter of buying property, finding a tenant, and making fat paychecks every month, well... you're forgetting maintenance, repairs, and tenants who don't like to pay up.

It's not easy. But it can certainly pay off.

That said, given our current economic climate, I would NOT recommend real estate, especially to someone just starting out. And I might get a lot of flak for that from long-time professional investors.

Why?

Because A) a housing market crash is likely in the near future once mortgage forbearance wears off and B) real estate is a full-time job with a steep learning curve.

You don't just start buying property. There's a LOT of research that needs to go into it and a lot of work.

That said, I have not yet ventured into real estate investing so take my opinion with a grain of salt.

Asset #6: Peer-to-Peer Lending

Also known as “crowdlending,” peer-to-peer (P2P) lending allows investors to essentially act as a bank. You loan your money out to other people on a P2P lending platform (such as LendingClub), then they pay you back the money with interest later on.

While peer-to-peer lending can be lucrative with relatively high interest rates, keep in mind that you may be lending to people with a bad credit history and there's a chance they won't pay you back.

Asset #7: Creating Your Own Business

Starting and growing your own business is the single most lucrative investment you can ever make. Not only from an ROI standpoint but also from what you will learn about how to make money and how money and finances work in the business world.

While most assets require a lot of capital to start making money, a business is one of the few that doesn't.

There are a lot of ways you can build a business in today's world, and some of them are very inexpensive, such as starting a blog. For less than $50 you can build a website and create an online asset that generates passive income, just like the one you're reading right now!

Some other options include:

• Freelancing (writing, coding, web design, transcribing, marketing... the list goes on.)
• Becoming a virtual assistant (helping businesses with writing, social media, email, etc.)
• Opening an eCommerce store
• Starting an Amazon FBA business
• Creating an online course

You'll notice these are all online businesses. Given the epidemic, starting a physical business right now is pretty risky and I wouldn't recommend it. But there are still some things you can do, such as dog sitting / babysitting / house sitting, starting an RV rental business, construction... you get the idea.

Head to the end of this guide if you're ready to start a business!

"Speculative" Assets

These last four assets are arguably not ACTUALLY assets because they don't produce anything. They make you money not by providing an income stream, but by going up in price over time.

This volatility in price makes them more speculative. Because while they can go up, they can also go down, which you obviously don't want. This means they are inherently higher risk than even the "risky" assets I listed above.

Let's take a look:

Asset #8: Real Estate & Land

You've probably heard about making a real estate investment to build wealth. Like your house, real estate or land CAN be a good investment... if you do your research and find property that will appreciate in value.

Unlike Real Estate Investment Trusts (REITs) or rental properties, no one is paying you to hold onto land or buildings. You need paying tenants for that.

However, if you buy a property or land and it appreciates in value because, say, the area is up-and-coming and being gentrified or something, then you can make money.

Personally, the only way I would buy land or real estate is if it was a large building renting to multiple tenants (these types of investments have excellent tax deductions because the government needs more of these kinds of properties) or if I was going to turn the property into an AirBNB rental.

Asset #9: Cryptocurrency