The Right Asset

On your financial statement, there are basic things you need to understand. These are;
Assets, liabilities and cash flow.

Your assets are basically the things that bring money into your pocket, while your liabilities can count for anything that takes money out of your pocket. When you understand both, the next thing to know is your cash flow. The flow of your money from income to expenditure.

This is the most basic definition you’ll ever get, take a sit and note down all the things that earn
you money. It could be your job, business or maybe an investment. These are your income

Liabilities on the other hand could range from your bills, tax, feeding, clothing, buying of luxuries and maybe to your surprise owning a car or even a house.

I recommend you don’t get it mixed up, a house is not an asset, there’s a difference between owning a house and having real estate. Your cash flow statement tells it all.

I’ll go back to the definition of assets and liabilities. When you buy a house, it takes money away from you, you begin to pay bills, you may even be paying a mortgage, you have to do maintenance of your house.

What is that doing? It’s taking money out of your pocket!

Go through your bank statements, look at where your money has been coming from, look at where it’s been going. If you own a house and you live in it, you’d realize that it’s likely to be a liability rather than an asset.

People often mistake a house or that car to be an asset, remember I mentioned earlier, liabilities take money from you.

The car that you bought also reduces in value as newer models are produced year in year out. You pay for gas, you’ll do your monthly maintenance, change a few parts as the years go by. More money out of your pocket

It’s important you have this basic understanding so you know the difference and have the right perspective of what an asset should be.

Do not be worried, it gets better. How so, you may wonder, it is simply by getting a house or property that brings money into your pocket, now that’s real estate.

Real estate is the part to earning for life, if you’re looking for the right place to put your money then real estate is a good choice

Here are a few reasons why you should get into real estate:

Real estate increases in value, you’re more likely to sell for a higher price than what you originally paid for.

It becomes an asset when you earn from rentals. You’ll earn from residential or commercial units. Tenants pat you rent which provides you steady cash flow.

Real estate is one of those investments that can give you financial freedom. You become financially free when your passive income exceeds your expenditure. With the payment from rentals you can earn without being there physically. Even better, the money from rentals pay for the maintenance, property management, mortgage, loans or any other cost of running.

With real estate you enjoy tax benefits, including deductions for mortgage interests, property taxes, and depreciation.

With the right strategy, if you get a property in a developing area, it’s likely you’ll hit a jackpot. Reason being in a developing area, the value of properties are sure to increase over time and even more rapidly

Real estate gives you an hedge against inflation, your property is likely to appreciate in value at a rate that exceeds inflation, helping to protect your purchasing power over time.

One lucrative strategy if done correctly through real estate is by buying distressed properties, renovating them, and selling for a profit.

There a number of strategies you can apply on the journey to becoming a real estate owner, I strongly recommend you talk to a financial advisor.

It’s important you get the property from the right source, not just any agent out there. It’s also important that you get the property in the right location, so you can yield as much profit as possible.

The goal Is to have the right assets that earn you enough money, so that those assets in turn can take care of your liabilities.

I hope this helps and you’re able to get the real estate property that changes your financial game.

Remember, your cash flow tells you all you need to know. Reach out to an expert and get started.

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