[Financial Education] Assets and the world of cryptocurrencies

Each day that passes we must make financial decisions that we make automatically, whether it is paying gas, buying clothes, paying the minimum credit card, borrowing from the bank for the purchase of a car, among others. Are these decisions enriching us or will we not be indebted to our future? The answer would be simple to answer for most people if they had received some financial education classes in school or middle school.

What is an asset

The Assets term according to Robert Kiyosaki, "It is all good or right that is in the capacity to generate cash"; In simple concept, an asset is all those goods that generate income periodically, in opposite ways we have the liabilities that goods that are generating expenses periodically. Let's visualize the concept with an example.

Two friends Jhon and Carl go together to the dealership to buy a car (Assets) each worth $ 20,000 dollars, both friends go happy with their purchase and each one goes home. John who is passionate about racing begins to buy new wheels, engine modifications and striking paint designs, among others. Instead, Carl had a different goal: he wanted his car to generate income, so he took his car to a car rental company where they would take care of the maintenance and would pay him $ 750 monthly for the use of the car.

After 3 years, the friends meet again and talk about their cars. John starts proud of his vehicle and comments on the $ 10,000 dollars he spends on engine modifications, upholstery, sound system, paint, among other accessories and also annually spends $ 1,200 dollars on maintenance and gasoline. Carl's turn comes and he only comments that he receives a check for $ 750 each month and no maintenance fee.

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Let's review your account balances and what benefit you got from your assets.

JOHN

AUTO: 20,000

DEVALUATION: -5,000

EXPENSES: -10,000

MAINTENANCE: -1.200 (3 years)

INCOME: 0

TOTAL: 1,400

CARL

AUTO: 20,000

DEVALUATION: -5,000

EXPENSES: 0,000

MAINTENANCE: 0 

INCOME: 750 (36 months)

TOTAL: 1,400

As we can visualize both friends started with the same asset, but they obtained very different results. Our assets can enrich or indebt us depending on our mentality and financial education we have received.

Assets are classified

• Assets of Effort
• Assets of Investment
• Assets Intrinsic

Assets of Effort

These are the assets that require our physical effort to generate benefits, such as a full-time job (40 hours a week), a contractor, sporadic jobs, FreeLancer or freelancers, among others. This is the most used asset where we strive for a few hours a day to receive a certain amount of money, it is the asset that generates less money and that requires more accumulated effort.

An example in the world of cryptocurrencies can be the Traders, these professionals spend a lot of hours analyzing the market of one or several cryptocurrencies to determine the precise moment in which to enter, receive benefits and exit. The day that the cryptocurrency trader does not want to enter the market will not be generating any satoshi.

Assets of Investment

They are the assets that require our money to generate profits, do not need much physical effort to receive income and more time and more money generated. This asset can be a company, real estate, machinery goods, works of art, collectibles, cryptocurrencies, among others. It is one of the most profitable assets and the greatest fortune they can create.

An example in the world of cryptocurrencies is observed in the mining of Bitcoin and altcoins, in which it is invested in a mining equipment, be it ASIC or GPU, to receive benefits in a constant manner and with little effort on the part of the investor.

Assets Intrinsic

These are the assets that are specific to people and that generate great benefits, these assets can be knowledge, talent, gifts, skills, influence, personal brand, leadership, among others. This asset can be seen in Youtuber, influencer, singers, elite athletes, investors, leaders. Networking (MLM), among others. Unlike the assets of efforts that their income is linear, the intrinsic assets income increase exponentially.

An example in the world of cryptocurrencies is a person who made Hodl of cryptocurrencies, which invested his money on 01/01/2017 in buying 1000 Ethereum that for that date was worth $ 8.24 for a cost of his investment of $ 8240 dollars, leaving saved his 1000 Ethereum in his Wallet until the date of today (05/09/2018) where the price of Ethereum is located at $ 260 dollars, that means that his investment increased from $ 8240 to $ 260 thousand dollars.

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@leondigarmu