First Step Towards Financial Freedom

First Step : ASSET CREATION

First step towards RICHES or FINANCIAL FREEDOM is creating ASSETS. Anyone who falls under the ideal situation as explained in the previous article : Embarking your journey towards Financial Freedom, is a situation wherein people enjoys the combination of MONEY, TIME & SECURITY, start their journey by first creating an ASSET for themselves. Now, why they create ASSETS ?

As a human being, we have a lot of limitations for example : Lack of time, Lack of energy, Health issues etc. Creating assets is smart move by the rich class. They know as human being we won't be able to work throughout our life. An employee can work for 40 years maximum in his/her lifetime to create money. That means we have LIMITED TIME to create money. Also, as we age our efficiency towards the work decreases, it directly relates to our health limitation. Person with age of 25 years is far more energetic or active as compared to 55 years old person.

One more thing which we know as a fact is that, we have to work in order to create or earn money. NO WORK NO MONEY. That's true. But its not written anywhere in books or somewhere else that you yourself have to work in order to create money. There is a probability that you are not working but still earn huge amount of money because something or someone is there working for you.

To solve this only limitation of humans, rich class come to a solution to create assets, which in turns work for them in a same or more advanced way no matter what's the age of the person who owns them. Remember, TRUE ASSETS NEVER GETS OLD WITH TIME RATHER IT GROWS YOUNG & ACTIVE WITH TIME.

To know this, you need to first get clear about what ASSETS are ?

ASSETS are defined by plenty of books and taught by our teachers in classroom in different complicated ways. Actually, its the "Conspiracy of the Rich" to teach you these concepts in a complicated way, so that you can never learn the true meaning of these terms which can bring you the results you wants. ANYWAYS. Moving ahead !! Let's first understand what ASSETS really are ? No complicated or difficult definitions this time.

Anything can be considered to be an ASSET, if two conditions got satisfied :

1) You must be the owner of that particular thing or something.

2) It must bring money into your pocket.

Read this again till you absorb it completely.

Assets can be anything either tangible or intangible, small or big, single or many etc. which must be owned by you and brings money into your pocket regularly in a continuous fashion. Now, if you ask anyone what asset is, I doubt if someone gives this definition not even your teachers. What they tell you about assets is : Property, Commercial space, Land, Gold, Silver, Mutual funds, Stocks, Bonds etc. If you ask anyone what are the examples of assets, they will certainly gives you these 2-3 examples which they have learned in their schools or in books. That's it. Yes, these are the assets but not necessarily they considered to be the only assets, or even sometimes assets at all. Sometimes, these so called assets which your school books or teachers has taught you appears to be the biggest LIABILITY in your life. Sounds fascinating, Isn't it ? How my property, gold, land etc ever appears to be the LIABILITY ? To get the answer, again read the definition of Assets above.

Let's define the liability in a same fashion - Easy and simple to understand.

Anything can be considered to be a LIABILITY, if following two conditions gets satisfied :

1) You must be or must not be the owner of that particular thing or something.

2) It takes money out of your pocket.

Please read this again in order to absorb it completely in your mind.

If you own a house by taking the loan from any bank, then first of all you are not the owner of that house, your bank is. Second, if you are also living the same house, then you are also not generation any income from the house, though it will take money out of your pocket in a form of monthly EMI, property taxes, maintenance charges etc. Now, read the definition of liability once again. You'll get to realize that your house is not your asset but your biggest liability. WHAT ?? But my teacher taught me, properties, houses, lands are my assets, then how it is even possible that they turn out to be my liability. THAT'S WHAT THE SECRET TO FINANCIAL FREEDOM, WHICH RICH PEOPLE OR EVEN THE GOVERNMENT NEVER WANTS US TO KNOW ABOUT.

Now, comes back to the concept of assets. Anything which you owns and puts money into your pocket is your ASSET. now, turn around and see everything around yourself. If you are in your home right now, which you certainly are as its a COVID's era, whatever you seeing right now - phone, water bottle, TV, AC, bed, curtains, your favorite deodrant, pen, paper, home-durables, show pieces, crocery etc. Anything around you which you have purchased from somewhere is an ASSET, not necessarily your but yes, for someone else for sure.

Let me give you an example.

The phone you are carrying right now is owned by you because you have purchased it. You are using it throughout your day. But, is it putting money into your pocket ? Are you generating a regular cashflow into your pocket from your phone ? Okay, let's take a look in light bit upward direction towards your wall. The Air Conditioner (AC) which have installed in your room, is owned by you, because this also you have purchased from somewhere by giving a handful of cash. But, think a little is it putting money into your pocket ? Are you generating a regular cashflow into your pocket from your AC ? Okay, let's take another example but this time you have to walk into your kitchen, now carry your water bottle in your hands and repeat the same steps. You are the owner of this particular bottle because you purchased it also from somewhere. But, is it putting money into your pocket ? Are you generating a regular cashflow into your pocket from this water bottle ?

To all the three questions above : Answer is a very big 'NO'. You are not earning a single penny out of these things which you own. Now, from the definition we have learned earlier before - concludes that YES, we own these things or everything in our house but these are not our ASSETS. Why ?? Because we are unable to make money out of it. BUT, someone is making money from these things also. WHO ?

If you own an IPhone, then Mr. Steve Jobs is making money out of it, if you own a Voltas AC, then Mr. Ratan Tata or the founder of Voltas is making money out of it. And if you own a water bottle of Milton, then Mr. Vishal Vaghani is making money out of it. Umm, Wait a second !! It means these people makes a cellphone, AC, waterbottle as their assets to generate millions of income ??? Absolutely !! But, my Financial Management book or my teacher hasn't taught me about these things that these things can also become our assets. Because they also don't know or think these things as an assets. That's called "The Conspiracy of the Rich". Here, what we have learned throughout our academic years goes all in vain. We look our property, land, gold, savings as our assets because our school or teacher has taught us, which actually are our liabilities. And, because of this unawareness or ignorance, we forget about the actual GOLD we are consuming everyday without any ROI.

Now, moving ahead to see a bigger picture.

The nightingale of our country Ms. Lata Mangeshkar, also creates an Asset. Do you know what it is ? Her evergreen songs which she has sung past many years back. She owns her songs and also make huge money out of it. Her songs are her assets. Intangible Asset.

The King of Bollywood, Mr. Shah Rukh Khan, also creates an asset. Do you know what ? Earlier in his initial career, he was supposed to do only movies against which he has paid a huge lump-sum of money, but for a single time. Now, he has his own production house namely, Red Chillies Entertainment, all of his movies are now produce from his own production house, which in turn now become his life-long asset, and now he is generating a huge amount of money from these movies which he produces himself whether he is acting in it or not. So, he makes his movies as an assets. Again, the intangible one.

Mr. Robin Sharma, one of the most renowned author of all time, also creates an asset. But, his assets are his books which he has written. He owns his books and also makes money out of it. The tangible one.

Mr. Sandeep Maheshwari, one of the most renowned motivational speaker in India, also has an asset. You know what ? His speaking skills, his knowledge, his improvisation, his ability to motivate his crowd etc. He own these skills and create money out of it. Again, the intangible asset.,,

What we have learned in finance books, in schools, or from teachers nothing makes sense in the real world. Everything around you can be an Asset or Liability. Now, it depends upon you, ,are you making money out of it or spending money out of your pocket ?

First Step, you have to take in this journey is to identify your skill-set. And make your skills or talent or anything you can as your ASSET - you own it or make money from it. Expand your understanding or limits. Get out of the small vision of assets which your finance books or teacher has taught you. There is much more about assets. You don't need to own a crores worth of property in order to make assets. What you must know is the basic concept about assets and how to convert your skills or anything you see around you into your income generating asset.

The income you'll generate from these assets will be termed as ASSET BASED INCOME.

Stay connected to know the rest these steps required to achieve financial freedom. Till then, Start making ASSET BASED INCOME. TAKE THE FIRST STEP.

If you want to know more on how to make assets for yourself, then feel free to contact me.

Thank you.