Best assets to build wealth (Start investing in assets!)

What are the best assets to build wealth?

Real estate, growth stocks, index funds, income producing websites, and cryptocurrency are good assets to build wealth. Investing in these assets have shown to build wealth slowly over time with consistent investing.

Imagine, being able to quit your job in five to ten years because you had an investment strategy. Your investments are providing a steady cash flow to pay for your lifestyle.

Being an owner in assets is how you build wealth.

Luckily for you, I’m going to show you which assets are the best for building wealth. I’ll show you the fastest way to build wealth, no matter your age. With any luck, you’ll be the next one at your office to retire!

20-104 - Best assets to build wealth (Start investing in assets!)

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What is the fastest way to build wealth?

The fastest way to build wealth is to buy or build assets which pay you. Wealth is built by owning something of value, an asset. Assets can either be purchased or built and the wealthiest individuals do both.

Cash flow is an important concept to understand. With cash flow, you have money coming regularly. Having assets with cash flow can help you retire early, survive job layoffs, or anything related to having a second income!

True wealth is having the freedom to do what you want, when you want. You can build assets, like websites, which pays you enough money to retire without having millions of dollars invested.

Most people buy their assets, usually in the form of investing in the stock market. You work your 9-5, use your income to buy assets and one day retire. Typically, this strategy works well for high income earners who keep their expenses low.

Alternatively, you can build assets which pay you outside of your job. If you want to build wealth the fastest, then you need to look outside of your 9-5. Use the income from your job and side hustle to fuel your investments.

How do you build wealth at any age?

Build wealth at any age by focusing on making more money while keeping your expenses minimal. Invest the difference between your income and expenses into assets to build wealth. The more money you can put into Investments, the easier it is to build wealth.

Most families start by trying to reduce their expenses. You might create a budget, cut out eating out or coffee and try to minimize spending. Tracking your income is the only way to make sure that you aren’t losing your money unnecessarily.

However, you can only minimize your expenses so much. At the end of the day, you are still going to need a place to live, hot water, and electricity. Once you’ve reduced your expenses, it’s time to focus on increasing your income.

Raising your income is the only way to build wealth quickly. Maybe, you’re making $50k per year and are able to invest $10k of it. What if you got a raise and now your salary is $60k? You would be able to double the amount of money you are investing. 

The problem with raising your income is lifestyle inflation. Lifestyle inflation is when you get a little bit more income so you feel that you are able to spend just a little bit more money. Most people fail to build wealth because they adjust their spending accordingly.

Lastly, you need to invest as much of your income as in order to build wealth. Invested money has the ability to grow for you, without any of your help. Investing is a completely passive way to build wealth. 

For example, investing $100,000 into an S&P 500 index fund would earn you $10,000 at a 10% ROI. A $500,000 investment would return $50,000!

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Best assets to build wealth

The best assets to build wealth include real estate, growth stocks, index funds, income producing websites, and cryptocurrency. All of these assets have a proven track record of solid returns. Individuals who build the most wealth invest consistently over a long period of time.

Remember, no investment is without risk. You should always seek to understand the assets you are investing in.

Real Estate

Real estate is one of the best assets to invest in for building wealth. When you invest in real estate, you are getting a tangible asset or something you can put your hands on. Real estate can be a very time-consuming investment, but property managers can make the investment easier.

The benefits of investing in real estate are cash flow, equity, and appreciation. Tenants are going to pay rent every month which gives you cash flow. When your tenants pay off the mortgage, you are building equity in the property without your own money. Additionally, the property should be worth more money in the future.

Most real estate investors get a 30 year, fixed rate mortgage. This loan usually comes with a low interest rate and allows investors to use other people’s money for an investment. In addition, 30-year fixed-rate mortgages are seen as lower risk lending.

Real estate investing even allows you to live in your house rent free. You can get a loan against, let’s say a four-plex, live in one unit and rent out the remaining three. The rent can cover the mortgage which leaves you a place to live for free!

You can do a cash out refinance if you’ve fixed the property up or the home value has increased.

For example, your property increases in value by $40k. A cash out refinance will put that $40k in your pocket and increase your loan amount. You can then use the cash out refinance as a down-payment for your next property.

Here’s a video by Graham Stephan on getting started in real estate investing.

Growth Stocks

Growth stocks are a very common method for building wealth with assets. A growth stock is a share in a company which is estimated to increase in value rapidly. As you can see, growth stocks get their name because the value is rapidly growing.

You can beat the average Stock Market return if you choose the right growth stock. For example, Shopify has increased in value nearly 4,000% in the last five years.

However, investing in growth stocks can be challenging. When you invest in an individual company, you aren’t well diversified. Most investors like to stick to index funds because of the level of diversification.

Index funds

Personally, I am a fan of index funds or exchange-traded funds. An ETF is a collection of stocks which are well diversifying for one low price. You can pay $100 for a share of an ETF and instantly own hundreds of different companies.

For example, VOO is the Vanguard S&P 500 Index Fund. When you buy one share of VOO, you instantly own a portion of 500 companies. Typically, the S&P 500 has an average Market return 10%.

Investing with index funds is simple. You don’t even have to think about investing because the funds are so well diversified. All you have to do is keep on buying any time you get extra money to invest.

Income producing websites

Another one of my favorites is income producing websites. You don’t need a lot of money to start investing with a website. Instead, you can use your time to learn how to build your first website.

Even better, it is completely possible to build a full-time income in only 2 years if you know what you are doing.Therefore, you could quit your job in as little as 2 years. 

What I like best about income-producing websites is that your income is separated from your time. While it does take time to build a website, the work you did years ago still produces income.

Let’s look at it this way. Maybe you know how to write a well-written blog article which can rank on Google and get 500 pageviews per month. On average, you can earn $15 for every 1,000 pageviews with display ads.

You are able to write 12 articles per month, which over the course of 2 years is 288 articles. Assuming each article brings in 500 pageviews per month, you get 144k pageviews. At $15 per 1,000 pageviews, you’re earning $2,160 passively!

Now, display ads aren’t the only way to make money. What about a $15 course sale?

At 144k pageviews, you probably have around 110k visitors each month. What if you sold a $15 course to 1% of your visitors?

Cryptocurrency 

Cryptocurrency is one of the newest forms of investing on the market. However, cryptocurrency like Bitcoin has had significant growth. Companies like PayPal are looking for ways to incorporate Bitcoin into their services.

Over the last five years, Bitcoin has increased nearly 5,000%. However, Bitcoin tends to be a very volatile investment. In other words, the price of Bitcoin is constantly swinging up and down.

However, I think we can probably see some good growth in Bitcoin as it comes more widespread. PayPal has mentioned that it is looking at incorporating Bitcoin into their services. 

Who knows, maybe one day Bitcoin will be the new Visa?

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Summary: Best assets to build wealth

As you can see, the best assets to build wealth can either be purchased or even built. Build wealth by investing in real estate, growth stocks, index funds, income producing websites, and cryptocurrency.

No investment is risk-free. You still need to do your due diligence when it comes to investing in an asset.

To build wealth, you must reduce your expenses, increase your income, and invest the difference. The more money you invest, the easier it will be to build wealth.

The majority of wealthy individuals understand that they must build an asset as well as own or invest in assets. Assets come in many forms, such as Real Estates, shares in a company, or businesses.