WHAT IS ASSET ACCUMULATION?

There are easy ways to build assets with little money; however, many people fail to build them – why, what is the real problem? Lack of Knowledge; simply put, people do not know the “process and importance” of asset building, hence it gets ignored.

The solution to this problem is quite easy; in fact, all that is required is an understanding of what the "process of asset building", is and the rest will be simple.

So, accumulating assets begins with the process of asset building which is to "Invest money to accumulate assets". Though the statement looks simplistic, to better understand it we must know the relation between ‘investment’ and ‘asset accumulation’.

PROCESS OF ASSET ACCUMULATION

Investment: This is a process of buying assets, purchased assets has capacity to generate returns over time. Read more about Warren Buffett’s 3 rules of investing.

Asset Accumulation: When assets are gradually acquired over time, and held long term, they start to accumulate. To make an investment process successful, one must buy assets with the intention of accumulation.

Asset Building: It is the “process of gradual purchase of assets, with the purpose of its accumulation“.

The important keyword of us is “accumulation”; buying assets without the intention of its accumulation, is almost a meaningless activity. Focus must be on buying assets and its accumulation.

Now that you know the process of asset building, in our next blog we address a more basic question.

Why should you build assets?