The following is a post in the Mystical Money Machine group that I created on Facebook.
Today we will be looking at different assets and which might be suitable for us personally.
As our society progresses and changes, so do financial assets.
I mention this because before 2008 there was not an opportunity to invest in crypto. And now this is a very viable asset class.
First, we need to understand what an asset or a financial asset really is.
How do I define an asset?
An asset is something that has the potential to appreciate in value in time.
And/or something that produces our cash flow.
According to this, many things can be assets for us.
But let us focus on the most common types of assets in this article, and as we progress through our journey together, move towards more difficult/uncommon assets.
I will start with my personal favorite at the moment, cryptocurrencies/blockchain related assets.
What is a cryptocurrency or a digital asset? I think in large part this is still being defined as of yet but this is how I see it.
A cryptocurrency or a digital asset is the reward for a user/human being that is given to them for their participation in the network. Which then can be used within the network or traded on an exchange for other assets.
With the rise of ICO-s (Initial Coin Offerings), it can be argued that some of these assets are almost like stocks in a company or at least similar to that. But You don’t actually own a part of that company. You own an asset of that company and when that company/service does good in the world/becomes popular, then the asset You are holding will most likely appreciate in value.
Pros of this type of an asset:
- Easy to invest in/start mining. Everyone with a computer or a phone can do it.
- High gains.
- You can store it on Your computer, external hard drive, phone, app.
- The availability of this asset.
- The promise of cutting out the middlemen and putting the power back into the hands of the people.
- Relatively small fees when investing, trading.
Cons of cryptocurrency:
- High volatility. Lots of ups and downs.
- High risk. Many projects/currencies die quickly.
- Hard to value. Still very early days with this asset. Hard to value what it’s actually worth.
- Government regulations. Not all governments are open to crypto.
- Low liquidity compared to other assets. Like paper money for example. You can use crypto very rarely in the real world.
It must be said here that when investing in crypto You really need to know the ups and downs of it. Currently. It’s like the early days of capitalism or the wild, wild west. No one really knows what is going to happen and what we really have here. But that’s what makes it exciting!!!
The second most popular one, cash.
Make no mistake, every time You hold on to cash or save or spend it, it’s an investment decision.
Pros of cash:
- Usability, it has achieved mass adoption. You can use it all around the world.
- Stability. This point can obviously be argued and with how things are going it’s questionable but as it stands now it’s definitely more stable than crypto.
Cons of cash:
- It does not really do anything good in society when You invest in it and hold it for example. Or just save it.
- Usually low rewards. Depending on the cycle of the economy and what currency we are speaking of.
- It’s not as exciting as for example, crypto!
- Different institutions decide on how much to print it, so we as humans have very little control over it. Someone out there decides when, how much and where to do it.
Let’s take another popular one, stocks.
A stock is a part of a company or equity that the company decides to sell on the market.
When investing in a stock You literally own a part of the company. And when You own a stock of a company that pays dividends for their stock owners, You literally get paid for owning that stock.
Pros of stocks:
- High gains.
- With dividend stocks, a nice way to create passive income for Yourself.
- Depending on the type of investor You are, time. You can just make a choice or choices and forget it for a while. Especially with the more stable stocks.
- You can invest in companies that You see are doing good things in the world. And with that supporting that cause further.
Cons of stocks:
- Usually highs fees, especially if You invest in foreign stocks.
- Pretty high volatility. You have to be able to take losses and sudden, deep losses when You want to invest in stocks.
- Companies go under sometimes, You have to be prepared to lose that portion of Your portfolio.
This is it for this week. Next time on Investment Tuesday’s will be looking at more assets and start bringing in the second house (which is our investments) in astrology. Looking at the second house is important to find the assets most suitable for us. Or what exactly to invest in that suits our personal type of energy.
Click here to join the Mystical Money Machine group. A group that’s designed to empower people in their financial lives through a Mystical twist!
If You are interested in shorter doses of wisdom, click here and follow me on Twitter. Where I Tweet about money, finances, life, spirituality, growth and more.
Ian Altosaar
