Assarites are something every single person should know and understand.
This word came up for me one time when I was helping a fellow Young Rich Hungry (YRH) member understand assets. Most people know what an asset is. For anyone who doesn’t, here is the definition straight from Google itself:
Asset: a useful or valuable thing, person, or quality. Property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies. Military equipment, such as planes, ships, communications and radar installations, employed or targeted in military operations.
The problem with this definition of an asset is that people still don’t understand what a true asset is. They use this word to call their investment in the stock market an asset right alongside their car. And they’re right. Technically, these are both assets. But one makes you money while the other loses you money. One acts like future income while the other acts like future expenses and even a liability.
This is one reason that people don’t get rich. They are confused about what is an asset that is making them money each month versus an asset that is losing them money each month. The reason for all of this confusion is in the word, “asset”. It is the word used for both things that make you money and things that lose money, because it just means something valuable. Most things have some value. Even my chair has some value. Does that make it an asset? Yes, technically. But does it make me any money? No. I might sit in it and work on activities that make me money, but it does not make me a single penny. In fact, I lost money on it because I had to buy it in the first place (but at least if you bought it through your business it is tax free).
This is where an assarite comes in. An assarite is an asset that directly makes you money. For example, Real Estate rental units bringing in $400/mo in rental income, or your e-commerce business making $10,000/mo, or $2,500 in income from interest in your stock market portfolio. Whatever it is, it directly makes money.
Here are some things that are NOT assarites: your car, your primary residence (unless you are renting out rooms or something & makes you at least enough per month to cover all monthly expenses of the house), your food, your insurance, clothes, computers, office materials, etc. All of these things are assets, but they do not directly put money into your pocket. They are all expenses that take money out of your pocket. Therefore, they are assets, but not assarites.
This is important here to YRH members because they know that the assets you want to be building up for financial freedom are assarites. They want to focus on buying and creating assets that will directly make them money.
Most people (non YRH members, of course) can’t tell the difference between an assarite and a liability. They don’t make the distinction that there are two types of assets: assets that make you money (assarites) and assets that lose you money.
Be smart like us here at YRH. Focus on building up your assarites and that is the way to great wealth.