What exactly is wealth? This is a common inquiry considering the present discussion over money, salary, and monetary imbalance. Political presenters from the two sides are contending for their specific perspective of the circumstance. This is an issue that the financial advisor must work to comprehend so as to decide his/her job in addressing it. One basic component to understanding the issues is to comprehend what wealth is.
There are numerous and, frequently clashing, meanings of wealth. The most well-known is that money is the estimation of the considerable number of assets. This would incorporate houses, vehicles, pontoons, stocks, securities, gems, organizations, and so on. However, a more reliable definition is by Robert Kiyosaki in his famous book Rich Dad Poor Dad. He has defined wealth as the accumulation of income producing assets. Assets that won’t create an income such as house, cars, jewellery, etc. are not income producing and actually consume income in operating and maintenance expenses.
Assets can be categorised into two categories, tangible and intangible assets. All that have been mentioned above so far are tangible. The primary intangible asset consists of human creativity, energy, and ambition. In fact,
most people rely heavily on this asset to have an income which can be converted into tangible income producing assets. The collection of tangible income producing assets also has one other huge advantage, they will produce an income even if you can’t work and thus provides a security for yourself and your family.
It is important to educate everyone about the need to invest primarily in income producing wealth, both tangible and intangible, instead of income consuming assets, investing gives everyone a solid foundation for improved economic wellbeing always.