Assets That Make Money and Produce Cash Flow

We’d all appreciate some extra money flowing in; if that wasn’t on your mind, you probably wouldn’t be reading this website.  So aside from picking up an odd job here and there, one of the best and most efficient ways to produce cash flow is to find assets.

An asset is something that you own that has a cash value.  It either creates passive income or can be traded for cash.  So let’s start in the most obvious place: you are your own asset.  You have skills, and you have a job that pays you to use those skills.  This creates income, or cash flow, for you.

To delve a little further, you can build assets as well.  For example, if you start a business or an online blog, etc., and it puts revenue in your pocket, this is an asset.  Of course, its true worth has to be measured against any expenses (known as liabilities) that you have to pay to keep your business or blog running.  If you have an interest-bearing savings account, or a 401(k), or you’ve invested in stocks, these are assets that can create passive income.  You can also access them relatively quickly in cash form.

Some people do not consider their homes or cars to be assets since they do owe money and make monthly payments on them, but they can be listed as assets.  They obviously do not create any immediate cash flow, but they can be sold for a cash value.  What makes people not consider them to be assets is the fact that they will likely use this revenue for a new home or car, so it will not stay in their pockets for long.

If you create a new product or write a song, you’ve built an asset.  Your product will likely be trademarked and/or patented, your song will be copyrighted, etc.  It doesn’t matter what you’ve produced in this example.  If it will be sold to multiple people and continue to generate income, it is an asset.  The amount of income may decline over time, however.  A new and better product might be created by someone else, your song gets lets airplay every month.  In order to keep the cash flow high, you need to either make occasional improvements to what you’ve made or make something new.

Your debts take away from the value of your assets, so in order to maintain a positive cash flow, you need to ensure that your assets are working to their full potential.  Is your product selling well?  Is your blog getting enough hits?  Are you getting the best interest rate on your savings account?  How risky are your stock investments?  Make a list of your income versus your expenses to measure your cash flow.  You’ll see how close you are to your money-making goals and where you may need to make some adjustments

2 Responses to Assets That Make Money and Produce Cash Flow

  1. Lee says:

    Valuable information that most people do not know. Assets - cash flow- tax returns. All necessary to learn and understand in the world of business..

  2. Jean-Paul Prentice says:

    Is there an exhaustive list of cash flow assets?

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