A shift in focus from income to assets
Hello fellow Protagonists,
The most common way that adventurers in the UK make an income is through paid employment. It may feel at times that everyone around us is becoming self-employed but actually 84.3% of all working people are still employees. I am part of that 84.3% and it is likely that so would the other three people nearest to me, including you.
Being an employee is the classic, traditional route through our working lives that most of us are brought up to see, hear and experience.
The question is though, is this still what remains in our best interest? To put all of our eggs into one basket or one stream of income?
A single stream feeding into a river would be peaceful but it could also be easily blocked up which would stop the river flowing altogether. A river that has many streams flowing into it is far more consistent, can manage the changing seasons and if one stream becomes blocked the river can still function.
The first time I remember reading about streams of income was in the book Rich Dad, Poor Dad by Robert Kiyosaki. This is a great book on personal finance and makes many peoples' top lists of recommended reads. He focuses in on the view that people miss out on chances to become financially wealthy because they focus too much on income and not enough on assets.
An asset is anything that puts money back in your pockets. The opposite would be a liability that takes money out of your pockets. An asset is a stream.
Even though this book was initially written in the late 90's. I cannot help but feel that its lessons are more important now than ever. The reason for the importance is not necessarily about money but arguably, more importantly, about freedom.
My key drive is freedom so now we are talking!
The importance has increased because the national retirement age that the government has set also increased (and importantly, is out of our control). It is already decided to be at least 68 years old for anyone still in the early-middle part of their career. This is placing some large rocks in my stream to delay arrival to the river.
Retirement was never designed with everyone in mind. It was initially set up as an insurance for those strange folk who lived past expected innings.
Our rivers need re-filling and the best way to do that is to add more streams (assets).
Your first task is to play the game Fable. Not only is it a brilliant game but also the only one I can think of where the main Protagonist can build assets as well as the usual questing and looting. You can use gold you obtain to buy shops throughout the map which generates extra income over time. A nerdy lesson in personal finance and more than my school ever taught me.
Asset building is a huge topic and something I want to be going into detail as time goes on. For now here is a list of potential assets that Buff folk could consider.
Stocks/Shares
Bonds
Cash
Property
Index funds
Commodities
Gold
Businesses
P2P lending
Renting equipment/vehicles
Patents/Trademarking
Ourselves
Keep an eye out on my next few post as I will go into more detail into what constitutes an asset; SPOILER ALERT your house isn't one.
Building assets could open opportunities to move away from being an employee your whole working life, or could allow us to drop to reduced hours at work long before retirement, as our streams are supporting our lower income.
Assets = Freedom
I will be implementing what I can to make sure it is my choice if I am working at 68, not because I have to. Who's with me?
GLHF
Warrick