The Top 5 Wealth Assets
“We're pretty bullish on crypto at the moment. However, if you put too much of your capital into it, it'll be a nightmare for you.” - Mark Robinson
Introduction:
In today's blog, we’re discussing the five best asset classes to consider for your investment portfolio. Wealth Coaches Mark Robinson and Paulina Roach break down these asset classes, share their insights, and offer tips on how to strategically allocate your capital for maximum returns.
With that said, here are the top 5 wealth assets! 👊
Understanding Asset Classes
Investing isn't just about choosing the right assets; it's also about timing, strategy, and understanding your financial goals. As Mark points out, "Your business should be a profit-making machine, and you should be ripping out that cash and investing it into other asset classes that are making money."
1. Property
"Property could be the best asset class that you want to get into, but if you go in at the wrong time, and even the wrong reasons, then it's going to be the worst for you."
Property investment can be lucrative, but timing and strategy are crucial. Whether you're considering residential or commercial property, buying and holding, or flipping properties, it's essential to understand your goals and the current market conditions. For more on property investment strategies, check out this resource.
2. Shares
Shares or stocks can be a great way to build wealth, especially if you focus on dividend-paying stocks that provide regular income. Mark emphasises the importance of cash flow: "There are some shares out there that don't give dividends and are purely for capital growth, which doesn't make sense to me because you're not guaranteed capital growth."
3. Gold and Silver
"Gold and silver, it's more of an insurance policy. If anything happens and the world goes to chaos, silver and gold will be worth a lot because money won't be valued at anything anymore."
Gold and silver are often seen as safe-haven assets. They protect against inflation and currency devaluation but are not ideal for cash flow. Holding physical gold and silver can provide security during economic downturns.
4. Cryptocurrencies
"We're pretty bullish on crypto at the moment. However, if you put too much of your capital into it, it'll be a nightmare for you."
Cryptocurrencies like Bitcoin offer high growth potential but come with significant volatility. Understanding the technology behind them, such as blockchain, is crucial. Cryptocurrencies can be a valuable addition to your portfolio if approached with caution and proper risk management. For more on cryptocurrencies, visit CoinDesk.
5. Cash Flow Assets
"Everyone should have a cash flow strategy as part of their portfolio. It’s the returns that people live off."
Cash flow assets, such as rental properties, dividend-paying stocks, and business investments, provide regular income. These assets are essential for covering living expenses and reinvesting in other opportunities. Developing a cash flow strategy ensures financial stability and growth.
Timing and Strategy
Property could be the best asset class, but if you go in at the wrong time, it will be the worst for you. It's not just about timing but also the strategy because it's like we can say property is in the top five, but what kind of property? Buy and hold, flip, development? There's so many different strategies.
So consider where you are at, where you want to go and how your portfolio should get you there. Take a look at the markets before you decide on the right strategy for you.
Conclusion
Investing successfully requires understanding the different asset classes, timing your investments correctly, and choosing the right strategies. A diversified portfolio with a balanced risk and reward.
If you have cash sitting on the side lines (not necessary a bad thing) and you're thinking about the five asset classes to invest in, what would be your first step? Think about the strategy behind it. Where you are now and where you want to be."
Don't forget to start thinking outside the square, ask yourself why you really have the cash there and how could the cash be working better for you, but still be available if needed?
If you want to hear the whole episode, you can dive deeper below.
