I recently visited Hungary’s capital city, Budapest, on a weekend break and as always came away with a few nuggets. I always opt for a walking tour and with no kids in toe this time I thought I’d spoil myself with a four-hour deep dive into the capital’s interesting history. It was on this tour that a throwaway comment caught my attention. We were standing outside the Szechenyi Spa which is one of the largest thermal baths in Europe and it is quite a sight. The tour guide said “as a nation we kept drilling in the hope of finding oil but instead kept finding water, so in the end we made the most of it.” And indeed they have. Hungary is known for its thermal spas and after enjoying a few I can see why. So why did that comment catch my attention and how can it help you? Well in essence, he was talking about assets …
Assets
As a country Hungary had been searching for oil but instead found water and according to the tour guide after many frustrating attempts it decided to make the most of what it has. Those thermal spas are now one of the biggest attractions and it offers something of value to the country and its residents. Now that may seem obvious, and from an outside perspective it is. However, how many of us have assets that others see but we are too busy looking for something else that we don’t see it? I have certainly been guilty of that.
So what is an asset?
“An asset is something of value owned by an individual or organisation.”
Legal Definition, Cornell Law School
You can go a little deeper and I would argue that an asset is anything and everything that brings value. You can relate this to several areas of your life. If you have good physical and mental health and you can derive the energy you need to perform at your best then your body and mind can be your greatest assets. Your skillset and experience can be treated as an asset if it enables you to progress you towards your goals and in monetary terms if the skillset you have allows you to bring in an income then it is an asset.
Why Are Assets Important?
In simple terms you have liabilities in life; things that take from you. The simplest way to think of liabilities is in monetary terms and there are costs to living and they are often going up. So how do you cover these costs? For most people it is through some form of income and often that income is in exchange for your time and there is nothing wrong with that. However, when you start to look at what you already have in terms of an asset base and start to look at how you can expand that asset base then you can start to get income/value from it that will help, and often surpass, paying your liabilities. That means that your assets can pay your liabilities on a monthly basis. And depending on the type of asset base you decide to create will determine how much of your time it requires.
To put this into context I will share an example; I trained as a journalist and early on in my career I was lucky enough to land a job in a TV newsroom. It was a great job, I enjoyed it and I earned enough money to cover my liabilities. But there was a catch; I was always required. When I didn’t work I didn’t get paid. Fine when everything is going well, however, not so good when life doesn’t go to plan. So I decided I wanted to build an asset base that brought an income in every month regardless if I worked or not. I chose property investment as a vehicle for several reasons I explore in other blog posts. However, that was a specific asset base and I was conscious of what assets I already had; an ability to learn the ins and outs of property investment, an existing home with equity in it, a desire and ability to talk to other people doing the same things etc.
This is why I say you are your biggest asset, depending on how you use the skills you have.
How to Use your assets
In essence – my view is I want to make my assets, both tangible (like property, business etc) and intangible (skillset, belief system, physical and mental health etc) work as hard as they can for me. My job is to figure out what I have and then to see how I can maximise the return.
My goal with this article is to get you to think about what you already have and what hidden gems you may be missing out on. Often we go looking for more and don’t always take stock of what we already have and how it can be used to get the best return.
Take my walking tour and the thermal baths in Hungary; it wasn’t what they were looking for, they were drilling for oil (according to my guide). But instead of ignoring what they found they made the most of it and now it’s an attraction.
So, what assets do you have? And let’s break this down into categories ….
Personal
What about you is an asset? What skillsets, experiences etc do you have? Are you in the physical shape you need to be to get what you want? Are you mentally in a strong position, do you have the beliefs that will help you achieve your goals? Do you know what your goals are and do you have a plan to work towards them?
Money
What assets do you have that are bringing in an income? You may own your own home and have a lot of equity in it, but is it providing you an income on a monthly basis? Do you have any land or other assets you can start to derive an income from? Do you have a pension? If you have a business do you have assets and intellectual property that is clearly defined and worth something? If not, is there a plan to create assets?
Before we get carried away with figuring out how to best utilise the assets we have I first want you to take stock of what assets you have. I am in the process of creating a complementary resource that will help you with this exercise. Without knowing your starting point it is really hard to know and map out the route to your ‘end’ point. This is a great exercise to get you started. Check back soon for my complimentary resource and I will post the link here or you will find it on my main website page (www.kellylemon.com)
Kelly Lemon
