As all we knows we need money which can be spent for fulfil our needs and enjoy the life too. If we have asset worth of crores also but not able to generate the regular or monthly income then it can only help us to tell others about our assets but on ground from those assets we can’t buy stuff for our need nor can help us to enjoy life until we sell the asset and convert into physical money.
So it is important that the asset what we are building should earn regular/ monthly physical income in form of money. We have seen many people around us who has good asset portfolio but their assets are not earning much.
What kind of assets are good for financial freedom
The assets which can generate regular income are the good assets.
For example if you have big land worth of 45 Lakhs which is away from town/ city and where cultivation is not possible. Price of this land is reasonably escalating every year but has no income from this land. In this case you may tell that you have big property but actually this property is not generating any income which can be used to run your daily expenses.
In other example if you have Apartment worth of 45 Lakhs which is giving rental income of 20k per month. Same time this property value is reasonably escalating every year. In this case you are getting regular income 20k by which you can use this money to fulfil your needs or can be used to enjoy life.
So while investing in asset we should properly analyse that what returns will get in future if we are planning for financial freedom. Asset who can generate substantial income are good for financial freedom.
Type of Assets –
- Financial Assets
- Physical Assets
- Business Assets
- Talent Assets
Financial Assets – Financial assets are those assets where physical money can be invested and this investments will be there in liquidity form. Such kind of assets are
- Bank FDs
- Post office deposit schemes
- Mutual Fund
These assets are best for financial freedom as this will help us to regular/ monthly income. Also these assets are good as the best benefit is that we can withdraw money any time or after lock in period.
Physical Assets – Physical assets are those assets which are in physical form not in form of money. These assets can generate good amount of rental/ lease income. Few such kind of assets are
- Real estate property
- Agriculture land
These assets are good if they are generating substantial amount of income in form of money. These assets may take time to sell off if you want to take out the money.
Business Asset – Business assets is as good and comes under risk investment. You can set-up business and can be give on rental basis or profit sharing basis which can generate regular income. Few examples are
- Manufacturing units
- Hotel/ Lodge
- Guest House
- Taxi/ Auto
- Many other such assets
Sometime taking out money from this kind of asset may difficult as after investing in these assets you have to wait for amortization period of investment. If you quit early you may loose money or you will get depreciated value.
Talent Assets – Talent is one the best asset where even without investing or investing little amount can generate good amount of income. Our talent is one of the asset which can generate regular income. Few are
- Book writing
- Affiliated Marketing
- Hobby which generate income. Like painting, sport coach, dance master, musician etc
- Many more
Above are the option which can generate regular passive income which will help us to take care of our monthly running expense after early retirement.
Apart from all mentioned above if we explore other options to earn during financial freedom it will be the right way as we have 365 days in a year and if we spend 90 days i.e around 3 months to earn some money without any major commitment & risk than it will keep us engage and also for add some more income will give to cushion to enjoy more.
The income sources should be like which can keep income inflow regularly and if it is monthly than it is always good. Many above said asset are giving good regular income but after certain period or after lock-in period. So we have to do investment in such a way that every month targeted cash flow can be generated from part assets and part assets will be invested for longer duration which will give returns after longer duration of 5-6 years.