Investing is likely something that has crossed your mind if you are a regular visitor to blogs like ours. Doing so can help expand your financial standing through a well-considered and carefully metered set of risks. You’ll likely get to this point by investing in either business, products, people, services, or property. All of these can be considered an asset. But what actually is an asset? How should you consider it? How should you protect it, and how should you improve it? We aim to answer these questions in the following article. We hope they yield some use to you in your efforts to develop a better investment portfolio.
On to question one:
What Is An Asset?
An asset is something of value, something which you own, benefit from, or use to generate income. It can often be traded in total for the value of its being, irrespective of its promise of future generated income. An asset is usually a belonging. While an employee to your firm could be considered an ‘asset’ to your firm, they are not legally defined as ‘assets,’ but contractual workers.
What Sort Of Assets Are There?
There are two kinds of assets. One is defined clearly as a tangible asset, and the other as an intangible asset. A tangible asset is usually something physical, as those listed in the previous heading. It is equipment, land, property, cash, to explain simply – something you can touch.
An intangible asset is often something which surely has value, but is harder to pin down. This could be a logo, a brand, intellectual property, a patent, software, a website, or things to that effect. It’s important to know the difference, because often these assets will be either protected or valued by different parameters. They are also subject to different timelines of relevance. A patent, for example, might only be serviceable for five years to a decade. Property will likely not be as temporary. It’s important to understand the length, legal classification, insurance type and use all relevant to the assets you have. This way, you will use them more appropriately, and place your investment in better areas.
Assets are not equal. Depending on your investments, some of which could be higher risk, some less, you may be entitled to forecast better or worse profits. Investing in high return assets will often yield a high reward, but for an extended percentage or timeline of risk. One asset in a market, property, for example, might be valued vastly differently to the property right next door, despite the overall DNA of the asset seeming the same.
It’s important to become intimate with your asset value. Not only will it help you determine the best way to monetize it, but it will provide you with further experience and understanding around capturing future assets of the same kind.
It’s important to protect your assets, as they are often the most valued financial objects you keep. If you value it, it’s likely others will too. For this reason, protecting your right to the asset could be as simple as keeping the correct legal defense to prevent copyright claims, contractual damage issues, or being paid for use of your asset correctly. For example, if you’re in the business of property, purchasing landlords insurance can keep your asset profitability relatively guaranteed, even if something happens to damage it in the short term.
You might also consider some more down-to-earth protection efforts to help the longevity and relevance of your asset. For example, if you’re working with a manufacturing supply chain, making sure your products are securely secured, and your employees are trustworthy can help any issues relating to competence in the manufacture or stock thievery. Changing the locks of your property between tenant lets, installing security systems and regular credit checks can help a landlord assess the viability of a select tenant.
Protecting your asset is one of the most important things you can do. If you have the correct legal, intellectual and physical defense necessary, you can be relatively sure that your money generator is in safe hands.
It’s likely you know what your asset does to secure your funding. But have you utilized it to its fullest aim? For example, letting property to a few young professionals as a shared house, or submitting your corporate logo for product placement in movies could help extend both tangible and intangible assets far and wide. Always look at how profitable your asset is, and how this fluctuates with creative possibility. This could help your profitability without having to spend much in extra investment potential.
With these tips, your asset should be a golden resource, one you can use for long-term sustainable income.