We all wanted to live life stress-free and are making our best efforts to get it in life and our general perception is if we get as much money then our life will be more comfortable & stress-free.
This is how our struggle started to earn money so our life will be more n more comfortable, good quality, stress-free & relaxing.
Even many people are having all comforts, money, assets but still they are not happy with life and their un-satisfaction makes them uncomfortable and unhappy.
If you see in reality, many such things are facially or say externally making your life good but internally your fulfillment is the prime thing by which you can live a comfortable, stress-free, relaxed and quality life.
So you should make your life externally good and as well internally good to have complete satisfaction in life. Both are equally important to live a quality life.
So by and large you must have two kinds of assets that make you externally & internally happy. Those assets are
- External Assets
- Internal Assets
Want is “External Assets”?
The External assets means those assets which keep you externally satisfied like money, dream house, good job/ business, luxury by which you feel comfortable and you can make a position in society. These assets have some financial value so you can always compare them to each other. To get these assets you need money.
What is “Internal Assets”?
Internal asset which keeps you satisfied internally and those are very much helping you to lead a quality life. It is not comparable. To get these assets you don’t need money. It will give you money.
Difference between External Assets & Internal Assets –
Both External & Internal assets are equally important to live life happily and with satisfaction. The major difference is that to build external assets you need money and to build internal assets you don’t need money.
- Cash Money
- Real Estate
- Paper Investments
- Speculation Investments
- Retirement Corpus
- Brand Building
- Online Business
- Resource Service
Let’s understand in details
1. Cash Money – Cash is known as the best asset in the world. You can buy anything in life if you have cash or liquid money. This cash can able to help you to buy assets, launch your business, for buying things for your comforts and many more things which you can do if you have liquid money. If you pay cash, in many places you get large cash discounts.
Although by cash money you are not getting any returns but it gives you confidence in life if you have cash money.
2. Real Estate – Real Estate is known as the best investment especially land. Although by land you do not get any regular income but your asset value will appreciate more as compared to housing & commercial property.
On the other side housing & commercial property is having generally around 7-12% appreciation in the very long run. But also sometimes you will get big appreciation in property value in shorter time 2-3 years and as sometime you will not get any appreciation in a long time even in 8-10 years. In housing & commercial properties, you will get regular monthly rental income which generally you cannot get from land.
3. Paper Investments– These are the most popular assets which most people are having. People are investing money in paper investments like Fixed deposits, Post Office schemes, Recurring Deposits, Bonds, SIPs, Mutual Funds, Life Insurance and many more such kind of schemes.
These investments will give you an almost fixed income from your investments and by this, you can enhance your money due to compounding interest. These investments are come under secured and semi secured investment options where your money is reasonably secured.
4. Speculation Investments – By speculation investments, people are making a good amount of money and multiplying their money in shorter time. These investments are like Equities, Lottery, buying unique domain names, etc. these come under risk investments where your money is completely at risk and sometimes it will become zero but it can multiply your investments also.
These speculation investments are giving you more return but same time your money is at completely on risk.
5. Retirement Corpus – Most people are ignoring this major important asset and only focusing on earning and spending money. This forces him to work till their older age just to fulfill their basic needs & requirement of life.
Many of us are spending a large amount of money on lifestyle, on kid’s education, vacations, etc. and taking heavy loans. They always think that at later age they will plan retirement corpus but this mindset and never ending liabilities are stopping them to save money for their retirement corpus. It will be very difficult to collect the large amount for retirement corpus at later age as your money will not multiply and you will not get the benefit of compounding interest which only you will get if you do the regular investment in a very long period say around 20-25 years.
After certain age especially after 60, many people are having medical problems due to which they are not able to work efficiently and for them getting employment or doing business will become very difficult. As they have not built any corpus for retirement they are struggling to sustain their life or they are just living mercy of their children or relatives.
So retirement corpus is a very necessary asset one should start building from a very younger age which will help them to live a good life at an age where their energy levels may become very low.
6. Business – Business is one of the asset which gives you higher returns on your investments. If you invest in any secured or semi-secured investment plan then you can fetch 5-15% annual returns on your investments. But in business minimum returns are mostly 10% per month which is around 120% annually. Apart from this after doing business for 8-10 years, if you sell your business to others then you can get huge returns on actual investments.
In business, the profits are very high same time risk is also very high. Sometimes you may lose all your invested money and many times business becomes liability as you can’t exit from the business as quickly.
So if you are confident that business may give you best returns then it is one of the best asset which will help you to create money & wealth.
7. Brand Building – This looks similar to business but a major difference is that a normal business has limitations but if you built a brand then it will pay off the huge amount of money.
Many people have developed their brand and earned huge profits from their businesses and their franchisees also.
To understand better let take an example of a person who has a food outlet. So basically he is doing business and he is getting a profit of Rs 1.5 Lakes per month from their food outlet business.
Now the same person has thought to convert this food business into a brand and he just worked on to build their brand and has done changes like a interior outlook, printed packing material of their brand, all staffs are wearing the uniform, professional cutleries, etc. Now as he is spending more on to build brand, his profit becomes Rs 1 lakhs per month from Rs 1.5 lakhs. As he has maintained the quality and good branded outlook, his business has grown at faster pace and he can able to fetch Rs 2 Lakhs per month from this outlet. He slowly tied up with their franchise and now at present, he is having 10 outlets in 3 cities. From one outlet he is getting an average income of Rs 2 lakhs per month. His total income from all the outlets is now 10 X Rs 2 Lakhs = 20 Lakhs per month.
This means building a brand may give you ample income if it succeeds to establish your brand. So the brand building is one of the good assets to earn money faster.
8. Network – Your social & business network sometimes pays off a huge amount of regular income. Many people are joining social clubs or social places where they are meeting with different kinds of people where later they can sell their product, business, can do joint ventures, investments.
Let take the example of the person who had not having much money for investment. He has created a good network in society. He is having a lot many good friends in which five friends are more close to each other. They are helping each other.
One of the friends has good experience in real estate field. They have decided that they all will collect some amount equally and invest in real estate. Experienced friend has searched a standalone housing property that was at the initial stage of construction and the builder was reliable. Also, he had located an area where he was expecting good escalation due to development.
They had negotiated with the builder and invested 70 Lakhs and booked two apartments of 2.5 BHK @ Rs 35 Lakhs each. Each friend has contributed Rs 14 Lakhs each and collected 70 Lakhs and paid full money at the time of booking. As they have paid the full amount, the builder has given Rs 40 Lakhs worth of flat just at Rs 35 Lakhs as he needs money to construct the building.
The builder has constructed in one n half years and that time each flat cost was around 50 lakhs. They have sold both the flats and got Rs 30 Lakhs profit which they have distributed equally and each has got Rs 6 Lakhs profit is just 1.5 years. Now every year they are investing in property jointly.
This is one of the examples where due to network they are getting profit every year without doing any work. Many business ventures, tie-ups, joint ventures people are doing due to their network.
By network also you can get regular income so the network is also known as one of the best assets.
9. Online Business – Those days have gone when to sell products people are using contacts of their dear once. Now by posting your products on online shopping sites like Amazon or Flipkart, you can sell your product sitting at home.
Many people are not even keeping any product and just by doing marketing they are earning money without any investment by drop-shipping.
Many people have created their website and selling their product and making regular earning.
Online platforms are providing many such opportunities where you can build online businesses and make desired income. So online business is one of the assets which helps you to become financially free.
10. Resource Service – In any country all businesses and setups are running and to run these they want resources like skilled manpower, machine, raw materials, set-ups, etc. If you know how you can arrange resources for them then people will pay you just for providing resources. Many people are paying hefty money to those who are into the supply of resources. The demand for resources will always remain as every day new things are developing only you need to be aware that what kind of resource you can supply so you will get handsome earnings.
So recourse service is also one of the very good assets which help you to become financially free.
Now Let’s understand Internal assets for which you don’t need money.