What Is An Asset & What Asset Classes Can I Invest In?


“An asset puts money into your pocket, and a liability takes money out of your pocket.” –Robert Kiyosaki

If a liability takes money out of your pocket, you’re probably realizing a few liabilities you already have, aren’t you? Your home, though typically considered an asset, does not put money back into your pocket after you pay your mortgage every month. That makes it a liability (but one that DOES put a roof over your head). In 2008, homeowners across the country learned how much of a liability their personal residences could be.

It’s not the most fun exercise to think about some of our assets as liabilities, but consider the freedom that gives you to identify (and fortify) your true assets. Putting money into your pocket sounds amazing, right? So how do you gain assets, in the truest sense of the word?

Your Greatest Asset (or Liability)

Assets come in a lot of forms — especially by Kiyosaki’s definition — they aren’t just one thing. They can be a property, an account, a business, or any number of things. If it fits Kiyosaki’s definition, you can call it an asset. When identifying your assets, there is one thing to remember above all: the buck starts and stops with you.

So, be really honest with yourself: are you an asset, or a liability? If you produce more than you create or consume, you’re a liability to yourself. However, you can also be an asset. You are, in fact, your greatest asset (when you act as an asset). By creating wealth and abundance for yourself, in all areas of life, there is nothing more valuable to you than you. If, however, you are creating further debt for yourself, you have to realize that you are the biggest liability you have. And something has to change.

It’s a hard lesson to learn: we can all struggle to take responsibility when things go wrong. The hard truth is, however, that you are responsible for your choices and actions. At Cashflow Ninja, accountability is a huge component of our philosophy. Once you become accountable for yourself, you can begin to transform your life and your cashflow.

If you consider yourself to be a liability, what is it that makes you so? If you spend more than you make, what do you need to do to fix the problem? There’s more than one answer, so take your qualities into consideration and then make a plan. We’re not even strictly speaking about money — do you expend too much energy on things that don’t give you joy or fulfillment?

Change it!

This is a process that requires honesty and integrity, but it’s worth investing in yourself. Not only can your cashflow change, but your quality of life can change by investing in yourself from all angles. Make room for yourself!

The Second Asset

If you are your biggest asset, the next most important assets you have are your relationships. Take a moment to reflect on the most prominent relationships in your life — do they sap more energy from you than they give to you? If the answer is yes — be it a romantic relationship, a mentorship, a workplace relationship, or otherwise — consider what needs to be done to protect your energy. Focus on relationships that fuel you and excite you, and watch how everything changes. Or, consider how you can turn an energy-sapping relationship into an energy-inducing one.

Energy is just another form of currency — one that allows you to perform at your peak, and put more out into the universe. And if you’re producing at the top of your game, you’re creating assets for yourself. Invest in your relationships, and you invest in yourself. See how it all comes full circle? If you put time into relationships that are liabilities (by draining you), you become a liability to yourself.

Your relationships constitute a large portion of your lifestyle and can affect you both positively and negatively. Decide how to proceed, and not only will you create more energy for yourself, but for the other half of the relationship!

Wouldn’t you love for your relationship to be an asset to both you and the other person?

The Primary Asset Classes

Now that you understand the most important assets in your life, we’re ready to talk about the “material assets.” There are four main asset classes: real estate, paper assets, commodities, and businesses. There are also new, developing assets like cryptocurrency and blockchain.

With all these options, the million-dollar question is — “What should I invest in?” And the million-dollar answer? It depends on the person.

Refer back to your greatest asset — you. You are a determining factor in your investing process. There is no magic formula or one-size-fits-all answer. When it comes to the asset classes we’ve laid out, the risk isn’t in the investment, it’s in the investor. One person can fail miserably when it comes to real estate, and another can turn the same property into a cash cow. So what’s the difference? The asset is the same, the asset clause is the same, so the biggest difference is the strategy and the investor. It all comes back to you.

Consider your own passions, your own strategies, and decide what the best fit will be. It requires that you know yourself — just as it requires honesty to know whether you’re an asset or a liability.

All of the investment classes listed have their niches. Real Estate is not just one thing, nor are paper assets, or commodities, or businesses. You don’t have to follow the popular route; you are allowed to forge your own path, one that fits who you are as a person and investor.

Understanding Your Options

Consider, for a moment, all of the possibilities within our classes that are open to you as an investor.

Within real estate, there are single family homes, multi-family homes, commercial real estate properties (like triple net leases), mobile home parks, storage facilities, assisted living facilities, and more. You could invest in rentals or just flip houses. You’d have to ask yourself whether you’d like to be a landlord, or hire help, or if you just want to renovate. You could run a thriving Airbnb business in a trendy area — there are even plenty of sub-categories within that. You’re only limited by your own imagination, interests, and abilities.

Paper assets include stocks, bonds, life insurance, and more. There are many strategies to utilize within any of those vehicles. At Cashflow Ninja, whole life insurance is one of our favorite vehicles for strategies like Infinite Banking.

And when we talk commodities, we mean products like gold, silver, oil, gas, solar, or even cannabis — which is a very popular commodity right now.

Businesses have nearly infinite potential. You’re only limited by what you can dream up and follow through with. Whether online or brick and mortar, you can build your own brand. Many are deterred by the failure rate of businesses, however, and instead purchase their own branch of a franchise to create cash flow. This can lower your risk because you know it’s already profitable and well-established. You can even invest passively into a business to create income.

Cryptocurrency and block-chain are on the rise, but there’s still a lot of debate about their future. It’s all up in the air, whether they will last, but that doesn’t mean they’re bad investments. You simply have to know the risk and determine whether you think it’s a good fit for you.

Be the Asset

It’s clear to see that there are dozens and dozens of strategies and ways to invest. There is, however, only one of you. If you consider yourself your biggest investment, the rest will follow. You, and all the things that make you who you are, will determine what becomes an asset and what becomes liability. This is the only way to approach successful investments, and create freedom — freedom of time, money, relationships, and purpose.

You can listen to the podcast episode I recorded on my new show, Cashflow Investing Secrets here.

Live your Freedom, Live Your Legacy, On Your Own Terms,


M.C. Laubscher is a husband, dad, podcaster & Cashflow Specialist. He helps business owners and investors create, recover, warehouse & multiply cashflow. You can learn more about exclusive cash flow strategies in M.C.’s new video series at https://www.yourownbankingsystem.com/

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