Foreword
The term Asset has been well-explained by different websites, for instance, Wikipedia, Investopedia, etc. However, I find that those articles have made the whole thing complicated. This brief article is written to provide the easiest way for you to understand what is an Asset.
What is an Asset?
An asset is an instrument that generates cash flow. Some websites such as Wikipedia or Investopedia may say an asset is a resource that consists of positive economic value. However, the definition provided by them is too broad. What is economic value? How can we say something contains positive economic value?
In the past, no one says Bitcoin is an asset. But now, there are dozens of people saying it is. So, if we cannot determine whether something is an asset, then it will be better for us to think it is an instrument that generates cash flow.
Common types of Assets
Everything that can generate cash flow could be called assets. When talking about examples, there are a lot. Here, I am going to walk you through several of them, the most common types.
i. Requires Long-time Operation & Maintenance
⇨ Companies, Blogs, Youtube Channels.
| Assets | Types |
|---|---|
| Companies | Sole Proprietorship, Corporations, Limited Liability Company, Partnerships, etc. |
| Blogs | Personal Blogs, Business Blogs, Professional Blogs, Niche Blogs, Reverse Blogs, Affiliate Blogs, Media Blogs, etc. |
| Youtube Channels | YouTuber, Director, Musician, Comedian, Guru, and Reporter |
ii. Requires Capital
⇨ Real Estates, Paper Assets, Cryptocurrency
| Assets | Types |
|---|---|
| Real Estates | Rental Properties, Flipping Houses, REITs, Real Estate Investment Groups, etc. |
| Paper Assets | Stocks, currencies, bonds, insurance plans, etc. |
| Cryptocurrency | Bitcoin (BTC), Etherium (ETH), Litecoin (LTC), etc. |
Final Thought
The word asset has been widely used when we are talking about achieving financial freedom. Hope this article helps you to understand what an asset is.
About Post Author
