Buy (or Build) Assets, Not Things

Buy assets, not things.

This is the key to financial security, as you’ve likely heard before. Things lose value (like your car), while assets gain value (like your retirement investment account).

The typical way to acquire assets is to buy them, like stocks, index funds, gold, silver, etc. As you keep purchasing these assets over time, usually through a set monthly investment, their value grows as your contributions add up and, more importantly, as time and compounding interest do their thing.

But what about when you don’t have $500 a month to invest? Most of us get behind in our retirement savings because there’s never a good time to consistently set aside substantial money for later.

But assets are more than market investments. Assets are anything with value that is expected to grow with time.

One of my favorites is real estate, because it feels tangible, people will always need homes, and I can control what kind of landlord I am better than I can control what kind of corporations are in my index funds.

Our first home eventually became an investment property when we moved for jobs. Everyone told us to sell, but we decided to rent it out instead. Our real estate agent offered her ominous warning, renters will ruin it.

Yet 14 years later, the property has nearly doubled in value, the various renters haven’t ruined it (in my experience, it’s repairable as long as it isn’t burned down), and their rent payments have been covering the mortgage, taxes, and insurance the whole time.

Sometimes assets aren’t acquired by shelling out $500 a month, but by learning new skills, gaining new experience.

By learning how to write a rental contract, vet rental applicants, and find an emergency plumber late at night, among other property management skills and experiences, we’ve invested relatively little actual cash into our investment.

Instead of investing $500 per month into market funds, we’ve invested time and effort plus more like $200 a month in maintenance, repairs, and improvements for the first 10 years, before increasing rent eventually covered those additional costs.

With what I’ve learned managing a rental property for over a decade, I could easily offer property management services if I wanted to. I’ve also learned how to create and provide value online, building another foundation for future financial growth. Similarly, a close friend left her career in childcare administration after learning a customer management software system that made her valuable to companies that rely on it. She now enjoys better hours, better pay, and better opportunities.

Because ultimately our most reliable (and oftentimes, financially affordable) assets are the investments we make in our own value – our skills, our experience, our special touch, our education, and more.

Maybe you feel behind in your wealth building in the traditional investment account sense.

But what assets do you already have?

What value can you offer or learn?

How can you invest something besides cash into building more assets?