What Assets Should You Buy?

People know what to do financially.

You’ve heard a lot about it here on Tired & Rich.

Ask a sample of 100 people about personal finance, and a lot will say:

“Spend less than you make, and invest the rest.”

Or some version of that.

But the farther you go down the rabbit hole of that statement, the more complex things get.
It doesn’t have to be.

So today, we will answer a fundamental question.

What assets should you own?

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First, what is an asset?

According to Investopedia, an asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit.

Too complicated.

Here is a more straightforward definition: something that increases in value over time.

Many people buy assets; they don’t buy the right assets.

If you recall my article on billionaires a few months ago, you’ll know they own amazing assets.

Assets that have increased in value consistently for a long time.

Owning enough great assets is the difference between a tight financial life and one of multigenerational wealth.

The trick, of course, is how to acquire great assets for a long time.

Meanwhile, some people think cars are assets – sure, they technically are. But you can’t retire off of a Honda Pilot.

When you think of assets as something that goes up consistently over time, you focus on acquiring things that do just that.

When you buy things that go up consistently over time, you’ll have more income, less stress, more freedom, and a shorter career.

But here’s the problem. The world is filled with assets.

Imagine a packed NFL stadium filled with 55,000 screaming fans.

That’s just how many publicly traded companies there are in the world. Add in the bond market, real estate funds, ETFs, crypto, etc., and the list gets magnitudes bigger.

And you’re supposed to pick out a set of investments from that massive group that will provide steady growth, sufficient income, and aren’t too risky.

That is… difficult.

However, I’m going to break down the four most common groups of assets (asset classes) people buy
before getting to the fundamental question at hand.

The four most common asset classes:

1. Fixed Income:
These range from money market funds to 30-year US treasury bonds. Most of you reading this know little about fixed income. Why? Because interest rates have been close to zero for the past 15 years.

Now, they are not.

2. Equities:
Equities represent ownership in operating companies – think a share of Microsoft or Google.
You own a slice of a company, can vote on pressing matters, partake in company distributions (dividend or share buybacks), and hopefully enjoy the upside in market cap.

3. Real Estate:
While owning a home does represent ownership, I am talking about real estate ownership of properties you don’t live in.

Real Estate has been a great way to beat inflation over time and provides a lot of utility for end users – it’s just tricky to buy.

4. Operating Companies:
These are private companies you own outright or are a shareholder/member in that have enterprise value.

Operating companies are challenging to grow and require a 110% commitment, but they typically yield the most significant financial outcomes (think Elon Musk owning portions of SpaceX, X, Xai, and Tesla).

Those are the four significant buckets that you can invest in.

They range from easy to buy (stocks and bonds) and hard to buy (real estate), to extreme (operating companies).

Within each asset class is the potential for decade-longer returns that could change your life.

But what should you be buying?

What assets should you focus on to reliably and consistently grow your net worth and passive income?

My answer?

Whatever is most convenient for you.

Let me tell you a funny personal story about this.

It was 2015 or so. I was at a coffee shop with my wife reading. I stumbled upon investing in mobile
home parks.

I was intrigued – they had some fascinating traits that make great investments, and I thought to myself,

“Maybe this could be it; maybe this could be my ticket to consistent, high returns.”

I spent the next few months researching the asset class.

Here are some other things happening around that time. I had just signed a deal with my dad to buy
the business, which would take five years. I also had access to some of the best investment research through my old employer, UBS.

So here I was, thinking I could become a trailer park titan at age 25, even though I knew nothing about the asset class, was undercapitalized, had no edge and no experience.

I was already in the process of buying a great business from my dad and simultaneously had access to equity and fixed-income research that virtually no one else had.

Where did this all end?

I never became a trailer park titan. I spent all my time and attention on the most convenient assets to buy more of—the business and stocks.

And guess what – it worked out great.

I did what was convenient and logical – I invested in the assets right in front of me.

Here’s why this is so important.

If it’s hard to buy, you won’t buy.

It’s that simple.

I’ve talked with hundreds of investors over the years, and I’ve found this to be true.

This works no matter the asset class.

It is deeply rooted in human psychology – humans are creatures of convenience. You don’t drive to the
McDonalds across town when there’s one five minutes away. You don’t fly across the country to buy a new TV. You don’t walk to work in the rain if you have a car.

If you do what is easy and convenient in every other area of life, why not do this with your portfolio?

I once heard that if a Subway restaurant offers a drive-thru option for customers, it will do 30% more business.

Why?

It’s convenient for customers.

So this weekend.

Figure out what assets are right in front of you, the ones that you know well, the ones that are easy to buy, and figure out how to buy more.

Put aside the distractions, stay focused, and stick with convenience.

Pretty simple.

See you next week.

P.S. If you found this article helpful, reply to this email with “spending advice” and get a free spending plan template.

To summarize:
1. Assets are things that go up in value over time.
2. Buying enough of them is crucial
3. Make it easy for yourself to buy more