You should consider only two types of assets when you think about a possible early retirement. The first type is the revalued asset. Appreciable assets are those properties that have an increasing value over time. These properties are vital to an early retirement.
Personal property or property that is depreciating is really detrimental to accumulating assets that are appreciating. Cars, clothing, and furniture are depreciating assets. While some are okay to invest in, especially if you have a new home, repeatedly buying them is not a good idea.
Reduce consumption now
In the same way that “slow down now” works, it’s time to cut back. We are not referring here to food and other vital staples. We are talking here about buying clothes that you don’t need, a new TV that you don’t need, etc.
Arjuna Higgins from Inter-Alliance Group states:
“Clean the house. If you want the best incentive to stop spending, clean your house. Go through all the closets and cabinets and put everything on the counter. Take an inventory. I don’t know about you, but I have a habit of buying things that I already have. at home “.
“You know what I mean. You think you’ve run out of something because there’s so much clutter in your house that you can’t find anything. Every time I take inventory, it immediately kills any need to splurge. I realize, I already have too many things “.
Valuing assets
What kinds of assets would be good for your financial future?
Liquid assets are basic. These assets are easily convertible into cash and have appreciable value as they are not used over time. Checking accounts, savings accounts and money market accounts (in the UK) are considered liquid assets. Certificates of Deposit are also a liquid asset. If you can’t invest in other appreciating assets, at least keep your liquid assets growing. “Investing in savings” is the way to go. If you are having trouble saving on your own, find someone to do it for you.
If you have a regular monthly payroll account, put a certain percentage of your monthly income in an annuity account. You can start from a minimum of 3% to a maximum of 15%. It all depends on your current state. Some people can save around 50% of their total income because they don’t have a family. Some families are so thrifty that a 20% reduction in their monthly budget does not affect them.
Another type of asset that is appreciated is the investment asset. Investment assets include stocks and bonds. Putting money in a mutual fund is also considered an investment asset. The beauty of investing assets is that you can see your money grow every day.
Real estate is another type of asset that appreciates. Invest in land, because land is inherently scarce. While the rental price may drop from one period to the next, land will always remain expensive. Invest in land whenever you can, so you’ll be safe in the future. In the United States, real estate is the largest source of money and wealth for most families. The more real estate you have, the more secure you will be financially.