Editor’s note: This article was first published in February 2011, just after the Spanish property bubble burst. The claim that property speculation is no longer possible in most countries, the “10 euros a year” cost of a website and the boom in used-car sales reflect that moment.
We’ll define a profitable asset as anything that gives us a steady stream of income, or anything that, once bought, can be counted on to sell for more than we paid within a certain period. Until very recently, the most highly regarded asset was property, because it made short-term speculation so easy. Today, in most countries, the property market no longer allows that kind of speculation.
These days, the most profitable assets include:
- Shares: Especially if they pay good dividends, although, as we mentioned earlier, living off dividends requires investing a great deal of money, which we may not have. Even so, choosing a good stock or a good investment vehicle can give us that income we’re after, or let us sell later at a profit.
- Patents: Registering a patent can be a business worth millions, because if we manage to register a novel patent, we’ll receive income every time it’s used. The hard part is coming up with the patent.
- Books: Writing a book is one of the most profitable assets, and right now, thanks to the internet, we have the chance to earn income for life every time our book is bought or downloaded.
- Websites and blogs: One of the most profitable assets of recent years. For as little as 10 euros a year (which is hardly any money) you can generate some very eye-catching income, in some cases millions, with the added possibility of selling the site to an agency that buys or optimises websites. We’ll go into this in more detail in future articles.
- Businesses: Buying an undervalued business, or one whose owner hasn’t managed to make it work, can be one of the best profitable assets you can acquire. Lately, people speculate with companies as easily as they used to with property.
- Property: It isn’t the business it used to be, but it can still be a great asset. Buying an old house, renovating it and renting it out is an asset as long as the rent we receive is higher than the monthly mortgage payment. The difference between the two is our income.
- Vehicles: Sales of second-hand vehicles have grown considerably. A dealership won’t pay what our car is really worth, so people now speculate with vehicles too. Buying an old car, fixing it up until it’s like new and then selling it is a very profitable business today.
- Your own business: There’s no better or more profitable asset than your own business or company, because it’s your creation, your masterpiece. It’s worth as much as you want or are able to value it, and the income you earn will depend on the business model you’ve built.
- Backing projects as an investor: Investing in an entrepreneur’s project is another way to earn income. Investment companies are now being set up that specialise in spotting promising businesses, especially online. If you help fund a web project, you can either become a partner and receive income based on its profits, or set a good exit strategy for that investment within an agreed time frame. It’s like investing in the stock market, but without going through the stock market.
I’m sure there are many more kinds of profitable assets.
Further reading
Featured image: frankieleon, CC BY 2.0, via Flickr.
