What's an asset - expanded

Expanding on this email from the other week:

"An asset is anything that puts money in your pocket now, or has the ability to put money in your pocket in the future, without changing your lifestyle" - Sound Financial Group podcast.

The without changing your lifestyle bit at the end is a really interesting addition, because it separates out things that many people would consider an asset by highlighting their limitations.

For example, if you own (or mortgage) your home, that's an asset... right? According to that quote above, it's not:

• Yes it will appreciate in value, but unless you rent out a part of it, it doesn't earn you money now ✖️ not an asset
• Yes it will earn money in the future, but only if you sell it... Meaning, usually, that you need to spend that money to buy another home ✖️ lifestyle change, not an asset
• By comparison, an investment property can do either or both - earn income now and put money in your pocket in the future when you sell it, without changing your lifestyle ✔️ asset!

Selling your family home and moving is a huge alteration to your lifestyle, especially if you move far away. Selling an investment property can mostly happen without affecting your lifestyle - meaning, you don't need to pack boxes, resettle your family, find new schools, etc.

Not everyone will agree with the definition, and I'm still getting acquainted with it - but I really like it as a filter.

Some examples of assets:

• An investment or commercial property
• A business you own (but don't work in 👈 lifestyle!)
• Superannuation funds
• A collectable car you never drive
• Original art
• A coin collection
• Original Star Wars film memorabilia
• And dozens of other things

I created the Digital Asset Incubator program to walk soloists through the process of creating profitable productised services that generate income now, and that also have the option to be sold as a standalone business down the track.

To me, it kinda skirts in the middle somewhere - may or may not affect your lifestyle (depending on how much you enjoy delivering the service I guess).

But the idea is that you build it parallel to your existing business, so if you do sell it, you only part with that one asset and not your whole business...

Please hit me with questions - I'm working to clarify this and explain it better, so am expecting that much of this is about as clear as mud 🫤