Show off assets vs. Real assets

An asset should bring you money. If this is the definition of an asset – your golf kit, your gold jewellery, your Mercedes, the house in which you live,  – normally what people consider assets suddenly look like ‘expense’ rather than an asset!

Every cheque that you sign is either an expenditure or the purchase of an asset. So your golf kit, car EMI, interest on the home loan, jewellery, your Merc etc. are all expenses. The reason why we call it an asset is simply we do not want to admit (some times to our own selves) that these are expenses! Some of these ‘assets’ are show off assets – buying a house in a vague location, a big luxury car, a bigger house,..are all show off assets.

However if we do a small SIP in a mutual fund, or take a life insurance policy, or buy national savings certificate – these are all non show of assets (I cannot show off my Rs. 20 crore life insurance policy, can I?).

So unless customers meet good financial advisors – and understand the good financial habits part, invest regularly in good  SIPs for the long term….they will have to worry!

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