Generally, when people talk about investing they think it’s about buying assets. However, that’s not the case. There are plenty of activities in which one can build assets with little to no money. If you create a blog, you’re creating an asset. If you learn, you’re improving your asset. When you go to work, you’re creating value. All of these activities have different pros and cons but one could say that all of them will bring you more money. Some of them are scalable, others not, and others depend. If you want to truly create a clean asset you should ask yourself the following questions:
- Do I own the upside in the thing I’m creating?
If you go to work, any work you do will probably belong to the company. So, working extremely hard won’t bring you better rewards. You’re dependant on others. You should be able to take full ownership of the things you created.
- Will the thing I’m creating work while I sleep?
In this question, there is the implicit assumption that you’ve completed the thing. This question will help you separate your work from your income. If you work for money there will be only so many hours you can work. However, if things work for you, the upside is unlimited.
So going back at the examples from the first paragraph. A blog, you can own it and it will work for you while you’re at sleep. If you learn you will own the knowledge, but there is an upper limit of time you can use the new skill (days have 24h). And if you go to work and create a super-cool software, the company is owning it, so you’ll be left out with an hourly salary.