Why You Want To Invest In Assets That Appreciate

Why You Want To Invest In Assets That Appreciate

Unlike cash, most assets will retain their value over time and even increase in value. Think about stocks, real estate, collectibles like art, etc. Many assets will be worth more in the future. Investing in assets is like putting money in the bank, the only difference is that it does not lose its value due to inflation. Besides, if the value is high enough, you can sell your property and make a nice profit.

Here are some important definitions you need to know if you want to start investing in assets.


Related: Online Marketing: 3 Powerful Ways To Monetize Your Email Subscribers

What is a stockbroker?

A stockbroker is a person or establishment certified to buy and sell stocks and other securities through stock market exchanges. Earlier, if you wanted to invest in the stock market you had to hire a stockbroker who would then place trades on your behalf. This was expensive and slow, nowadays investors can easily invest in stocks themselves through a brokerage account at an online stock exchange.


What is a bond?

Unlike stocks, bonds do not give you ownership rights. They define a loan from the buyer (you) to the issuer of the bond. It's one of the three main asset classes often used in investing. By investing in a bond you basically give the government or a company a loan which will in return pay you a fixed rate over time.

Bonds are issued by governments and businesses when they want to raise capital for investments. The government or company will then compensate you with periodic interest payments, generally twice a year.

You do not necessarily profit from the company's growth because you technically do not have ownership rights. Therefore you will not see a major impact when the company is not doing as well.

Bonds, then, give you 2 possible benefits when you hold them as part of your portfolio. They give you a stream of income, and they neutralize some of the volatility you might see from owning stocks.


Related: 6 Ways To Help Increase Your Blogging Revenue


Assets appreciate over time 

When we are talking about appreciating assets, we mean that they tend to go up in value over time. At least that is why investors invest in assets. The aim of buying these assets is to increase your net worth and diversify your portfolio. Still, there's no guarantee that appreciation in value will be, as there will be times these assets can lose value. Especially in difficult times, value can rapidly decline. So please consider this before you invest in ANY asset!


Conclusion

Investing can be risky, but in the end you can earn much more than by putting your money in the bank. If you put your money in the bank it's never going to appreciate, in fact, inflation will make it less worth. So try to learn as much as possible about investing, and always calculate the risk.


Good luck!
Ron.


About the author:
Hello, my name is Ron Hoekstra, founder of The Liberty OnDemand. I hope you like my content, if you want to know more about me, please read here or subscribe to my newsletter where I will keep you up to date with new posts and other useful content.



Subscribe To Our Newsletter

*we do not share your personal details with anyone