The Wealth Stack: 5 Assets You Need for Financial Freedom

Updated: Mar 21

if you're reading this, the chances are good that you're ready to achieve financial freedom, whatever that means to you.

Different women interpret financial freedom differently. For some women, it means being able to buy what they want and when they want. For some, financial freedom could simply mean becoming debt-free, while for others, it could mean not worrying about paying bills or sudden expenses.


But you can’t be financially independent if you don’t let money work for you. And no, it doesn’t mean having your money answering work phone calls. What this phrase means is using your money to make more money and freeing up your time to concentrate on other important things.


Passive income is the term used to define revenue generated from assets that often require medium- to low levels of involvement.


Wealthy folks avoid living on any single financial stream. The average millionaire has an extensive portfolio of 7 income-generating assets that guarantees a steady positive monthly cash flow.


These assets aren’t exclusive to seasoned investors. In this article, we’ll look at 5 top assets you should own in your investment portfolio to help compound your nest egg over time.


NB: This post isn’t intended as financial advice but rather a starting point for further research. Since I have no idea regarding your current financial situation, I cannot say which, if any, of these assets would be the right fit for you.

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The Wealth Stack: 5 Assets You Need for Financial Freedom


Tip #1 - Dividend-Paying Stocks


Stocks represent the equity or ownership in a business and are an attractive investment vehicle for long-term growth. Also, stocks require no ongoing maintenance on your part.


While they’re highly liquid, stocks are not for the faint-hearted. Their volatile nature makes them difficult to hold during turbulent times. But if history is anything to go by, stocks have proved their ability to deliver consistent long-term returns.


You can earn dividends that you can re-invest. Good dividend-payers tend to be found in blue-chip stocks, i.e., stocks from well-established corporations.


You can either buy individual stocks or a fund that gets you broader stock exposure, e.g., an S&P 500 index fund.


Tip #2 - Bonds


When looking at volatility, bonds are much calmer compared to stocks.


In simple language, bonds are IOUs, i.e., loans made from investors to borrowers to be paid back over a pre-determined term length. Borrowers can either be a state/federal government, a business, or an individual.


Many bonds require borrowers to make periodic payments over the loan term before they can pay back the full principal balance at the end of the term.


Bonds have a more consistent income stream and tend to rise when stocks fall. You can choose to purchase individual bonds or buy them through bond funds.

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Tip #3 - Real Estate


Outside of the realm of stocks and bonds, real estate is the next popular income-producing asset.


Many homeowners make the mistake of assuming that buying and living in a house counts as an asset.


The home is yours, provided you don’t miss mortgage payments. And even if you have no mortgage on your property, you’ll still need to pay property taxes. The moment you stop paying property taxes is when you will realize that it’s the government, and not you, that actually owns your home.


The wealthy take a different approach to real estate. When they buy a single-family home or multi-unit property, they lease it out to tenants and hire a property manager. If the rent amount is greater than the cost of the mortgage, maintenance, and management fees, they get a positive cash flow.


If you lack enough capital to purchase an investment property, you can invest in real estate through REITs or Real Estate Crowdfunding.


Tip #4 - Certificates of Deposit (CD)


Banks are almost always looking for more capital.


By taking a certificate of deposit with your local bank or credit union, you agree to pay them a fixed amount of money every month in exchange for interest on your money.

The mechanics of a CD are very simple. The bank uses this money in the market, resulting in higher interest when compared to a standard savings account. At the end of the day, you also earn back your principal. If this sounds too good to be true, it’s because it is.


CDs are relatively illiquid, meaning if you want to withdraw early, you need to pay a penalty fee and give your bank a 30-day notice.


The maturity time of CDs can range from a few months to a few years. While a short maturity rate will help address the early withdrawal problem, longer-term lengths typically involve higher interest rates.


CDs are insured in the US for up to $250k by the FDIC.


Tip #5 - Building a Business


If CDs aren’t for you, maybe you should consider building a business.


You can devote as much, or as little, time as you want when exploring this option. It depends on whether you want to be involved in the business’ operations or just provide investment capital and expertise as an angel investor.


There are risks and rewards associated with both choices, so do your due diligence before jumping into business ownership.


Protect Your Assets


If you have taken the time to build wealth, you will need all kinds of insurance to protect your assets. I’m talking about ensuring you have enough homeowners (or renter’s) insurance, health insurance, life insurance, and car insurance.


Not being covered means you’re making yourself vulnerable to losing some or all of the wealth you’ve created.


Elevate Financial Services offers a variety of insurance products to protect your assets. Call us today to schedule an initial consultation.

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