22 Assets That Are Always Better Than Cash

hello everyone today we are going to have another long video that is going to be filled with valuable content for over a year now inflation has been rising faster than ever in 2022 inflation was 6.5 percent if you had like a hundred thousand dollars at the beginning of the year the real value of your hundred thousand dollars now worth just 93.5 thousand dollars you lost six and a half thousand dollars by just keeping your money in your account that's why rich people don't often keep cash but rather buy assets that appreciate over time house prices for example might have fallen slightly but overall since the beginning of 2020 they have risen substantially but real estate isn't your only option where you can store your money there are many other places where rich people store their wealth for it to keep growing even when inflation is at double digits so here are the 22 assets that are always better than cash there is going to be a table of content in the description so you can skip to the parts that you want to learn or come back and re-watch them again this video is a combination of many of our previous videos so grab a drink and some snacks hit the thumbs up button and enjoy the video number one dividend stocks what's the ultimate goal of any business to make money whether you like it or not if the business isn't producing cash then it's not sustainable even if it has a hundred billion dollar market cap we can value companies as much as we want but how would they benefit their shareholders if they aren't making money and what's the guarantee that they will survive in the future that's what makes dividend stocks so different from the rest especially those which are known as the king of dividends these are the companies that have been increasing their dividends for over 50 years they've survived Wars recessions inflations you name it the stock price don't always perform as great as tech companies for example but they still grow usually higher than inflation but at the same time provide you with the cash flow you need if these companies could increase their dividends for over 50 years what makes you think that they will stop in the coming future that is why they are some of the best assets to hold in your Arsenal most people look into the stock market as the only way to invest their savings however the stock market isn't always the best option you have far more options than you realize number two government bonds I'm not really a big fan of Bones since they usually have the lowest rate of return however out of all the Investments government bonds are the most reliable for your Government Bond to default the ingarnuous government has to go bankrupt the United States is the world's most powerful and stable economy if it goes down the world economy goes down that's why they are considered as the safest Investments ever Bond raids have an inverse relationship with interest rates if interest rates rise bond prices drop and vice versa because higher interest rates make other Investments more attractive which lowers the demand for bones and lower interest rates make bones more attractive they are not the best source of income but a lot of wealthy people turn to bones to keep at least part of their assets safe and let them grow at the rate that is slightly higher than inflation in the short run they don't always beat inflation but over the long run they have proved to be inflation proof number three cash flow businesses since the beginning of the internet Revolution investors started to care less about the actual profits a business would make and are focused on the value of their stocks however regardless of how much your stocks are worth you need cash on the table to spend on your needs and wants that is why a lot of professional investors care about the cash flow how much cash does a certain business generates there aren't many options when it comes to cash generating assets besides dividend stocks that we have discussed already but sometimes being a partner in a small traditional business like a grocery store is far better than holding a bunch of stocks that do not generate any cash a grocery store is just one example of course they do require some level of management but if you have reliable Partners if then it should not be a big deal number four mutual funds in September 2021 Facebook's stock price was 378 dollars Facebook was one of the fastest growing stocks since the beginning of the pandemic but in the last six months this talk fell by 45 it literally fell to the pre-pandemic level as if it didn't gain anything out of super low rates and aggressive Bond purchases by the FED that is why mutual funds exist they take investors money and invest them in wide range of Securities from stocks to bonds to real State there are a million types of mutual funds from Equity Funds to income fans their funds that invest in certain sectors others invest based on the size of the companies and some invest in everything my favorite are index funds that have been in the market long enough to have some track record but it's also important to pay attention to the fees they collect hedge funds for example have a really high fee but rarely beat the market Vanguard S P 500 Index is the best in my opinion they have the lowest fees ever and have proven to be inflation proof they have a track record of over 60 years where they had returned a historic annualized average return of around 10.5 percent since its 1957 Inception through 2021. I personally keep a big chunk of my investments in the S P 500 and contribute to it every single month number five real estate I couldn't finish this video without the real State the real estate market is so old it's difficult to invent anything new in this market however the exact same thing makes it stable it is always outperforming inflation over the long run reliable data on the value of the real estate in the US is relatively murky before the 1920s according to the case Shiller housing index the average annualized rate of return for housing increased 3.7 between 1928 and 2013. the inflation adjusted appreciation over the same period have been 1.9 percent of course it is not as great as the stock market but as we have discussed earlier real estate isn't just about price appreciation it's also about cash flow and a place to live the value that it provides overall is far more than the price appreciation but even if we take price appreciation alone we have enough data since 1920 that proves that it has always outperformed inflation some people might say that this time it is different inflation is super high but back in the 1980s inflation was as high as 13.5 percent twice the number it is today it is normal when we have periods when inflation is higher than normal because other times it is lower than normal between 2013 and 2016 it was around 1.5 percent but next everything even better is if you have a mortgage on your house especially if you have got a very decent rate since over time price appreciation beats inflation at the same time the cash flow that it generates will pay off the debt every single year dozens of thousands of companies filed for bankruptcy in 2019 that number was almost 23 000 but during financial crisis the number of companies that go bankrupt skyrockets at the peak of the housing crash in 2009 over 60 000 companies filed for bankruptcies when the economy fell into a recession and interest rates were hiked and based on how the economy is performing we might face another such a crisis in the coming future you're not sure yet how bad it will be but everyone agrees that it is time to pay back and that's just the number of companies that file for bankruptcies if we are talking about individuals then that number is as high as 1.5 million on average year most bankruptcies take place in New Industries industries that are still developing such as crypto the crypto Market has emerged as a result of 2008 financial crisis in fact up until 2017 crypto was known only in the dark web since it was the only way to trade anonymously but since it became mainstream more and more people have entered the game but we're not sure how exactly the future of crypto will look like that's why the number of bankruptcies and scams in this industry are pretty high remember the internet back in the 1990s everyone slashed.com at the end of their name pretending to do something related to the internet Mark Cuban created an online radio and sold it for 5.7 billion dollars to Yahoo making billions of dollars at the same time bankrupting the internet giant back then Yahoo Yahoo was as big and as important as Google is today I still don't understand how did they agreed to pay almost 6 billion dollars for an online radio they could have replicated the business model at the fraction of that cost a year later the.com Bubble Burst and Yahoo had to shut down the project so if you want to lower your chances of bankruptcy maybe you should go for a more traditional business an industry that has a very low chance of experiencing such a crisis of course there are plenty such industries from farming which is as old as Humanity itself to manufacturing cars but most of you who are watching this video that is probably Irrelevant for you not many are striving to become Farmers although the industry is changing pretty fast with vertical farming and new Innovations farming is turning into a high-tech industry that is attracting the best mines in the world especially since we are in the middle of a global food catastrophe more than ever trying to come up with different and more creative ways to solve this problem of course it is not going to be solved overnight but in the long run it is definitely the industry that will keep only growing but what are the industries that will not fail but at the same time it's much more practical to get in and build a small or a mid-sized business let's take a look at five of them if you're ready give this video a thumbs up and let's start with the first one number one content creation since the invention of the radio we found out that human attention is valuable Radio is free but they monetize your attention by displaying ads by 1930 around 40 percent of U.S households had radios installed in their homes that's when content creation became valuable since there was a way to monetize it then the TV came out and revolutionized the entire industry while around nine percent of Americans owned a TV in the 1950 by 1960 that figure had jumped above 80 percent we all have grown up watching TV but it wasn't easy to create content for TV to attract audience since the initial investment was really huge however with the creation of the internet and later smartphones content creation was now possible for anyone all you had to do is plug your phone and upload the content to plan platforms such as YouTube Instagram or other social media platforms and you could monetize it however you want people literally make fortunes through insta reels live a long Tick Tock or YouTube with the invention of 5G and smartphones getting better and cheaper the industry will only flourish number two marketing imagine you start a clothing business you will most likely be selling pretty much the same thing that everyone else does you're either going to be creative and come up with your own design to sell to high-end consumers or turn into a reseller and Target the mass Market either way you're going to have a lot of competition so the only way you can drag more clients to your store is by presenting your product in a better and much more appealing way that's where marketing comes into the picture paying in sales today doesn't mean being in the store convincing people to buy more but rather set up social media campaigns to Target the right people with the right message to attract them to the store social media has definitely revolutionized the industry it is never going to be the same again since we have found out the importance and the value of the data the data that we can collect that can tell us who exactly is going to buy what well in theory it looks like the industry is crowded the reality is far from that because you really don't need much to get into this industry a lot of people have entered the game but very few actually know how to drive sales it is not just about throwing money into Facebook but turning that money into clicks that turn into sales well it's a relatively new industry it is not going to be irrelevant anytime soon as long as there is capitalism which is to be honest is the only system that proved to be working over the course of human history the industry is only going to grow number three education the global Education Service Market size is expected to grow from 2.8 trillion dollars in 2021 to 3.1 trillion dollars in 2022 at a compound annual growth rate of 10.7 percent in fact the U.S education Market alone is expected to grow to 2.3 trillion dollars by 2028. interim has also reshaped the education sector making it easier to spread the knowledge experts can share their knowledge through different platforms for a fraction of a price if you had to go to college for any sort of Education in the past that is not the case anymore sometimes buying a course for a few hundred dollars is far better than spending thousands of dollars in school and wasting your time especially when it comes to practical skills such as marketing real estate or content creation Fjord handed a million dollars today and told to invest it what would you do you would obviously want the highest return possible to make your money worth even more but how isn't a million dollars enough do you really have to invest it and risk it the answer is you should always invest your money just look at today's inflation rates one million dollars a few months ago isn't worth nearly as much as today the value of the dollar shrinks and if you do not invest your money you will have much less buying power than you assumed you would have when you had a million dollars in your hand when you think about investing a million dollars you have a few questions to ask yourself what are your goals think about what are you trying to turn your million dollars into and why what are you trying to achieve is there a certain dollar amount you need or a specific goal you're trying to reach are you investing for retirement and have a dollar amount in mind what is your risk tolerance your risk tolerance greatly affects your investing decisions the more risk you can take the higher the rewards you can earn but again there are no guarantees it's always a good idea to diversify with aggressive and conservative Investments to reduce the risk of loss what is your timeline as you set up your portfolio and invest a million dollars you should have a timeline in mind I do saving for retirement that is 20 years away or are you saving for something more immediate the longer the timeline is the riskier the Investments you can make now that you know the importance of investing a million dollars to help it keep its worth and make it grow here are the top seven ways to invest it but before we do that this is not Financial advice and everything that said in this video is for educational and entertainment purposes number one franchising franchising is a way to become an entrepreneur when already established business if you buy into a franchise that is popular in your area or even up and coming in your area you can build your target audience and compound your million dollar investment when you buy a franchise you buy the rights to the business's name products Services images and all marketing material depending on the franchise you invest in the franchisor may have more say in the business than you would like so make sure you do your research and know the role of the franchisors play in your business even though you're buying a cookie cutter business though you will still have your work cut out for you running an optimal business getting the customer base and growing the business is all on your shoulders you buy the rights to the business and then handle the rest so that you can make your investment grow number two rental properties investing money in rental properties is a great way to earn passive income AKA make your money work for you depending on where you invest you may even be able to hire a property management company so all you have to do is invest the money and sit back to collect your monthly rental income you can invest in many types of rental properties including single family homes multi-family homes apartment buildings condo buildings and commercial real estate such as Office Buildings retail centers or medical offices when you invest in rental properties you are the landlord unless you Outsource the job to a property management company if you do this the property management company's fees come out of your rent but if there is enough room in your profits to afford it you can have truly passive income real estate appreciates an average of 3.8 percent per year although the past couple of years has seen much faster rates of appreciation the capital appreciation in addition to the cash flow you could earn from rental income plus you may be able to write off many of your expenses you enter managing the properties because the IRS views running rental properties as a business number three startup if you would rather start your own business versus jumping on someone else's idea with the franchise you could invest your million dollars in a startup business but before you do to your market research make sure there is a need for the product or service you plan to offer should also see what your competition will be if other companies already had the same idea do you see a void that you could fill a million dollars is a lot of money and enough to get your startup off the ground but if it turns out to be successful then you will definitely need extra financing that's why create a business plan to get financing from a bank if and when you need it but also to give yourself a map to see how this will play out keep in mind that you don't necessarily have to start your own startup there are millions of startups with UniQue Ideas investing in them at early stage could turn out to be huge in the future but you need to be very careful since 9 out of 10 startups fail but usually when one of them succeeds it makes up for all of the losses number four ETF if you're looking for a lower risk investment than stocks you can invest your money in ETFs One Fund holds multiple Investments so your money is already Diversified rather than investing in just one company you can invest in multiple ETFs spreading your money throughout many different sectors and diversifying your investment even farther if you want to invest in real estate but don't want the burden of actual owning the physical real estate you could invest in real estate ETFs this immediately diversifies your funds across multiple properties without the need to manage the properties yourself your Investments won't grow as fast as some of the tech stocks but they will be stable number five tech stocks tech stocks are always a good bet and when you have the money to invest in them and take advantage technology stocks looks so expensive at the onset because of their higher share price like Amazon that cost over two thousand dollars per stock but the sector itself remains extremely profitable even throughout economic downturns but it also could be risky and full dramatically like it did recently technology stocks are also highly liquid should you bail out higher liquidity means you can sell your Investments at any time well there is never a guarantee you will walk away with a profit knowing that you can liquidate your Investments quickly can provide the reassurance you need to part with your money allowing it to grow even farther number seven Diversified the key to success with any investment is to diversify putting all your money into one investment is risky and could result in you walking away with a lot less than a million dollars instead for the greatest results diversify your Investments put money in aggressive dividend stocks as well as less aggressive value stocks keep some money for bonds from almost guaranteed return but then Tech risks with Investments like crypto every million dollar Investment Portfolio should also include some type of real estate if your adventure isn't want to be a landlord invest in physical real estate and enjoy the cash flow if you would rather have something more passive invest in real estate ETFs or real estate crowdfunding just don't put all of your ex into one basket with this investment as the last couple of years have shown us any company can fall apart into the blink of an I which means no dividends for dividend shareholders but it's a nice reward when the profits are there investing a million dollars is the best thing you can do for your money don't let it sit even a high yield savings account or CD it won't grow nearly as much as you need it and it definitely won't keep the pace with inflation 2022 proved to be much worse than most people expected markets haven't been this bad since the 2008 crash the crash that not only crushed the entire U.S economy with huge corporations such as lemon Brothers went bankrupt but it took down the rest of the world with it it was like the domino effect that led to the euro debt crisis China was hit fairly hard with a huge drop in exports however in a few years the economy recovered and the United States experienced the longest economic expansion in its history over a decade of economic expansion however as a wise man once said whatever Rises will eventually fall so did the growth in 2020 but government spending kept the economic will spinning the only problem with the current crisis is that the Bible has been growing so much that we are now at that point where we no longer catch Point another crisis in the middle of such a panic most retail investors are panicking and selling off their assets before everything crashes farther a trade war with China a global pandemic an actual war in Europe oil prices above 100 and worldwide inflation it seems like if you're not going to sell now soon your investments will be worth pennies but that's not what one of the greatest investors in the world thinks Warren Buffett is urging investors not to panic and look for great deals in the Market at the height of the 2008 financial crisis when Banks were falling down one after another Buffett pumped five billion dollars into Goldman Sachs shortly after Lehman Brothers collapsed it literally saved the bank since investors lost confidence in the system and here the most respected investor is throwing billions of dollars into Goldman Sachs in exchange he received 5 billion dollars in preferred stocks paying a 10 annual dividend that's 500 million dollars of cash every single year as well as warrants enabling it to buy 43.5 million of Goldman common shares at a hundred and fifteen dollars each at any point in the end swing five years while many called him full back then nothing is better than cash in the bank but that didn't last long in 2011 Goldman Sachs bought back their preferred stocks for 5.6 billion dollars and handed buffets a 500 million dollar bonus so that raises a few questions since we are in the middle of another crisis a crisis that could end up much worse than the 2008 crash where some companies already began going bankrupt before the recession officially started what are the assets that will keep generating income not only during the crisis but even after if you're ready give this video a thumbs up and let's Dive In when you think of Bill Gates you think of attack billionaire who is focused on developing technologies that would revolutionize the world he became a billionaire in his 30s after finding Microsoft one of the largest tech companies in the world you would never connect Bill Gates to farming however last year he aggressively began buying Farmland he has amassed nearly 270 000 Acres of Farmland across the country which means he owns more land than the entire city of New York Farmland doesn't sound as cool as Tech startup but at the end of the day you can't eat your iPhone and MacBooks to satisfy your basic needs Jeff Bezos is another example after successfully building the largest e-commerce platform this purchase 420 000 acres of land mostly in Texas as Mark 21 said buy a land they are not making it anymore it's a limited resource your stocks on crypto can go down by 50 overnight because of an economic crisis but you will never wake up one morning finding out that your Farmland is worthless Americans make up just five percent of the world's population but consume most of the world's resources especially food but now the world is on a brink of anger according to IMF the world economy is at risk of food crisis as a result of unprecedented supply chain disruptions caused by the war in Ukraine Ukraine and Russia are some of the biggest exporters of grain which are halted as a result of the conflict which has caused a worldwide shortage of food so oil prices aren't the only source of global inflation what is certain about the future of humanity is that Wars have always been part of human history and the demand for food will never go away as long as they are humans which is why billionaires across the globe especially in the U.S are acquiring farmland number two royalties if you have watched Shark Tank you're familiar with royalty deals that often thrown away by Kevin O'Leary instead of asking for a bigger pie of the economy Kevin O'Leary is known to go after royalties the question is why when you invest in a company you become one of the shareholders it is in your best interest for the company to grow so that one day you're either going to sell your piece of the pie and finally enjoy the fruits of your labor or the company will finally get profitable and share the profits with you however that might never happen Uber is a 43 billion dollar company that is still bleeding cash Facebook the largest social media company in the world has never paid a diamond dividends but unlike Equity with a royalty deal investors will always be on The Winning Side a royalty of 10 sales on all products would mean that if a firm sells a thousand dollars worth of goods they have to pay a hundred dollars to the party they have a royalty deal with even if the business is bleeding cash the investor will still be making a profit as long as there is revenue whenever a computer manufacturer sells a PC with Windows operating system pre-uploaded on it they pay a royalty fee to Microsoft they're different kind of royalties from intellectual properties such as patents to franchise rights that are often used by chain stores to leverage their products and services royalties guarantee cash on the table regardless of the income of the business finally private businesses private businesses make up almost half of the US economy a great number of them struggled tremendously during the pandemic especially restaurants individual stores and small businesses those who survived are yet to overcome another challenge a challenge of high inflation High interest rates and lower demand it is not a surprise we'll witness a lot of bankruptcies in the coming future not because these companies are bad but but rather because they simply don't have the airbag to withstand the crisis so big businesses will most likely jump in to acquire them since they will easily become a money making machine once the storm passes how much do you think Jeff Bezos mix per day a hundred thousand dollars how about a million dollars a million dollars a day means 365 million dollars a year but in 2019 bases earned 39.2 billion dollars which means if you divided into the number of days in a year that will amount to 107 million dollars every 24 hours isn't that insane but that's not by accident because rich people are focused on buying assets an asset is basically something that consistently puts money back into your pocket unfortunately we mostly spend our money buying liabilities such as cars phones and houses that constantly take money out of our pocket that's why we don't see our wealth grow as much as rich people do in fact some people are in so much debt that they get poorer every day since interest is so high that's why here in this video we are going to explore the seven most important assets that the rich buy to get richer so make sure to listen carefully because it might be one of the most valuable things you will ever learn next Mutual fans there are two types of money problems the first one is when you don't have enough of it you're probably all familiar with that but the second is when you have too much money and you have to manage it keeping it under your mattress isn't a good option since inflation is going to eat it out over time but neither keeping it in the bank is a wise option since interest and fixed deposits is too low however you've got another option which is mutual fence mutual funds are not index funds index funds blindly invest in a certain index like the S P 500 but mutual funds carefully analyze the market and try to Beat It by at least a small margin when you invest a billion dollars a one percent difference will make a real difference because it will amount to 10 million dollars so when you're given an option with two or three percent higher you're looking into making extra 20 or 30 million dollars that's why the rich always try to keep most of their money in mutual funds and just watch it grow over time but an asset doesn't necessarily means a physical product to a royalty it could be a skill of course it's not an acid in the traditional meaning but it is in many different ways having a skill that's always in demand is a constant stream of income even if that takes some of your time take an example of Surgeons it's a highly complex skill that requires years of Education and Training however on the other side it means there isn't much competition and means that you can charge a premium for your service that's why a lot of Surgeons are actually millionaires since they are paid generously of course that applies to other professions such as lawyers Physicians and so on however with the rise of Internet skills such as coding online sales and programming languages are becoming vital and can be self-taught at home it's a perfect option for those who are at the beginning of building their wealth if you don't have enough to invest in the stock market you can invest in acquiring more skills that would potentially generate much more in the long run but you know what's much better than real estate online products like music it's super difficult to come up with good music however once you do it it can continuously generate income take an example of Eminem for the past 20 years he's been at the top of the music industry the music he has released suggests I'm Not Afraid is still listened by lots of people across the world even though it was released back in 2010 and with the introduction of spotify and apple music the artists have gained extra streams of income however you're not limited to music online products are becoming more and more popular such as courses presets apps softwares and a lot more and finally connections it might not seem like an asset but if you look at it from a different perspective they could be much more valuable than you think great things happen when talented people from different aspects of Life come together Under One Roof if a business idea knowing the right people can make starting that business a million times easier in fact an advice from the right person could save you years of experience if not decades since we live in a world of social distancing try networking using digital tools such as LinkedIn or other social media tools if you want to connect with me head to our website and shoot me a message this list could be much longer but I included what I personally think are the most important ones

Channel: Proactive Thinker

Views: 175,799

Keywords: Proactive Thinker, minoritymindset, minority mindset, minority123, jaspreet singh, rethink rich, financial education, financial literacy, passive income, cash flow, make money, invest money, investing 101, investing money, investing in stocks, investing in real estate, earn passive income, build wealth, real estate, stocks, real estate investing, stock market investing, real estate 101, stock market 101, how to invest, investing for beginners

Id: J7xB82WKnIk

Length: 37min 32sec (2252 seconds)

Published: Mon Jan 23 2023