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Owning Assets Beats Having a Job

owning assets

It’s hard to argue with the Frugal Expat’s assertion that owning assets tops having a job, assuming the income provided by one or the other is in the same range and covers your wants and needs.

That may sound far-fetched, but if you focus on acquiring income-producing assets rather than depreciating assets (which are essentially liabilities), it can and will happen eventually.

Personally, I like to focus on total return, but since leaving my job, I’ve paid more attention to the truly passive income I have coming in, and I’m happy to say that it’s enough to cover our typical annual spending, even if it’s nowhere near what I once earned as an anesthesiologist. It doesn’t need to be.

The post that follows for today’s Friday Feature originally appeared on The Frugal Expat.



After reading the book Rich Dad Poor Dad, most people come under the conclusion that owning assets is better than having liabilities. That is so true. “The rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.”

This is at the point where you have to wonder if you acquire enough assets would it be better than working a job.


What are Assets?


Quite simply, assets are items that contain an economic value to an individual or company.

So what are assets and how can we acquire more of them?

Assets are things that generate income. When I go into work, the asset that generates income for me is my skill. Once that skill is outshined by others my asset is no longer valuable to me.

Real estate can be assets since they produce an economic value.

Stocks are also assets. They are the individual pieces of a company owned by the people that hold the shares.

These are all assets. They help produce economic value and income for people like you and me.

So how can owning assets be better than working a job?





Passive Income creating wealth:


The simple answer is passive income.

As I sleep, I am not working and therefore actively I am not creating any income. The sad part is that many people do this. Their sole income comes from working. When you stop working the income stops coming in.

I am all about creating passive income. Passive income is the money or income coming into your pocket through the means of not doing any work at all. It is all done passively.

If you own stocks, and the stocks produce a dividend, which is a share of the profit from the company, then the stocks are producing income passively for you.

The same can go for owning real estate that produces income. If you were to own a place and rent out the property, you will produce a flow of passive income.

This passive income in the long run will help create more and more wealth, by the use of compounding interest. It will also allow you to not have to rely on working as well.

Compounding interest is the interest or the rate of return of an asset that is compounded. If your portfolio generates 7% annually and you compound it for the next 30-40 years then it could be a big number.

Let’s say you have $100,000 saved in investments. At 7% for 40 years that $100,000 will be worth around $1,497,000. That is a lot of money. That is money your assets have produced through compounding interest.


Owning Assets can make you wealthy


Owning assets is a major thing that rich people often do. If they have assets producing passive income they will not have to produce active income as much, and then they will be able to concentrate their mind and skills on other avenues of life.

Rich people would rather own income-producing assets than have liabilities like car payments and a large mortgage they cannot afford.

It is time to think about owning some assets.

Stocks are my favorite asset right now. I invest simply into index funds that track the total stock market. Every quarter those funds produce a dividend, which is reinvested to buy more shares. Without doing extra work, I make passive income while I sleep.

Real Estate is another type of asset people tend to buy. You can buy REITs or even rental properties to create this asset from Real Estate. Should you own property? That question is all up to you, but it can produce some good income.


Financial Independence by Owning Assets


As we get closer and closer to our retirement ages, people want to make sure their assets can cover them as they age. The problem is that if you have not acquired enough assets you will have to continue to work.

The simple way to find out if you have enough money or assets producing enough is to find out your financial independence number. We do this by using the 4% Rule.

Take your spending X 25= FI number. So if you take $25,000 x 25= $625,000. $625,000 will be the amount of money you need to safely withdraw 4% from every year for the next 30 years.

My goal is to hit financial independence. I want to make money when I sleep, and therefore it will help push me to the point where I do not need any more money to actively work.

That is financial independence. It is when you have enough money and assets where you will no longer have to work.

How can owning assets be better than your job?

The simple thing is that you do not have to go into work if your assets produce more income.



Let’s do an example.


I own VTI, it is an ETF that tracks the total stock market. Every four months, or quarterly, it sends a dividend to me, which is cash money.

Right now, I have around 416 shares. The dividend for December of 2020 is around $0.78 per share. If we do some math, that comes out to $324.48.

In one day of work I make about $74. If we were to divide $74 into $324 we would come out with around 4.4. So that dividend paid about 4.4 days of work for me.

Dividends are paid quarterly, which is four times a year.

If you think about that, my dividends have paid about 16 days of the year that I work. It is all passive as well.

If I can increase the amount of shares I have then the dividends will increase leaving me with less days I have to work in the future.

Value of the ETF also goes up. If your portfolio goes up 7% a year, and you grow it more and more each year, then after a few years you will have have enough to retire on if you continually invest your money.



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Here are Some Wealth-Creating Assets.


Owning assets makes this machine roll. The more you own the less you have to work at your job. That is the name of the game. Work less and get paid more.

This can be with any assets. Real Estate that produces income is an asset. Stocks, bonds, and owning small businesses are assets.

Zach from Fourpillarfinance likes to own websites. Websites are another way to create income from your assets.

If you cannot afford Real Estate you can get into owning REITs ( Real Estate Income Trusts). These are companies that buy real estate, and they will pay you big dividends. That is another opportunity to own an asset.

Anything could be an asset, as long as it produces an income for you


Different forms of assets such as stocks, real estate, small business, REITs, your own products, peer to peer lending


Steps to Acquiring Assets:


If you want to be someone that acquires more assets you can take a few steps along the way to help yourself out.

You can start with investing. It doesn’t take much money to start investing, and then you can get that compounding effect to start working for you.

Stop buying liabilities. It is time to delay some of that gratification and start buying some assets that can fund yourself to buy liabilities. Let your assets buy your liabilities.

Next do some research on assets you would like to get into such as Real Estate, websites, REITs, and other ways of earning passive income. There are many opportunities out there, you just need to do some research.

Here are some steps you can take to start owning some assets. Owning assets is better than a job, the more you own the less you have to work.




Some Last Thoughts:


Assets produce income and create a life where the job you work is not always needed.

Would you like to sleep and earn money? I know I do. It is time to stop buying crap and start buying assets. Owning assets are better than working a job.

What would you do?

“Spend less than you make, stay out of debt, and invest the rest”



Do you earn passive income from your assets? Enough to quit your daytime job? What are your thoughts? Comment below!

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3 thoughts on “Owning Assets Beats Having a Job”

  1. I think farming w/ liquidity pools or staking strong cryptos while priotizing dip buying can be a great strategy too. Staking rewards are basically cryptos version of dividends. Cosmos ecosystem for example is very user friendly and lots of opportunity in staking alone. It also grants you the opportunity to receive airdrops from new projects built on Cosmos. Users who have had a couple hundred dollars of Cosmos token in the past were airdropped coins worth $1200. You have to stake using Keplr wallet which is how you interact with cosmos ecosystem. I recently moved my cosmos coins off exchange due to the ample opportunities that exist interacting with cosmos ecosystem directly on Keplr. You just have to claim your airdrops manually.

    Cosmos is built around interoperability between different blockchains. “Internet of blockchains” bullish AF on it.

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  3. That is the pure truth, assets are far better than a job because they are generally much more secure and do not impose as many limits on your time. I would argue that real estate is not really a passive income source. I have a number of friends who have done extremely well renting out properties but in every single case they spend a lot of time taking care of the myriad issues that come out of being a landlord. It is theoretically possible to have a property manager, CPA and lawyer handling all of that for you but most likely they will also consume most of your passive income. And even then managing those managers is still a job, its still in no way passive. It is true that some people enjoy managing that stuff, but some people also enjoy conventional jobs and that doesn’t make their income passive. But that’s just my opinion as a former failed landlord.


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