Asset control is where it's at...

Please Share This Page:

One of the truly important secrets I learned about making money while you sleep is this:

The controller of the asset is the one who makes the real money.

After studying all kinds of methods - from real estate through to internet marketing, I found that this concept was a "principle of wealth" that applied right across the board. It seems that no matter what business you are in, you can look at it from the angle of asset control and gain a deep perspective of the workings of the business and of who is likely to be successful.

Others too have discovered this philosophy. Robert Kiyosaki famously said that "The rich don't work for money; money works for them" - and he was talking about the same phenomenon.

Ever heard the joke that job stands for "Just Over Broke"? When you are doing a job you may make some money, but at the end of the day, you are working to help someone else build their empire and develop their assets. You are effectively selling your time and skills for cash - but what usually happens is that you pay the bills and then need to go back to work again.

An asset portfolio of one kind or another, is the only real thing that can set you free from this seemingly endless cycle of work that I call "The Wheel". Others have called this wheel "the grindstone" - a perfect metaphor as it goes round and round and wears you down. However, as much as people feel the pain of this, they very often continue on in the same way - usually because the immediate needs of survival make other options difficult. They often resign quietly to a lack of clear, viable choices.

Enter the Entrepreneur

A true entrepreneur is not just a person who is self-employed, but is someone whose objective is to develop assets, with the view to continued profit from those assets.

It's easy to see how many businesses, especially small startup businesses, miss this fundamental point. Beginner entrepreneurs have often been led to believe that because they are "working for themselves" rather than working for some other big company, that they will be on the road to freedom - however, if they do not have an asset acquisition strategy, they will usually end up still tied to the wheel. Often, it can be worse as in addition to their work, they now have to do numerous other jobs - none of which they were skilled in.

For example if you rent a small business property and work as a trader or product maker; unless you are working towards acquiring holdings, or developing a system that enables the business to be profitable even when you are not there, you will still stop making money very soon after you stop working.

Ultimately it is the assets that are the key to freedom - and an asset, to the entrepreneur, is defined as something that works for you to make you money.

A business, at the end of the day, should aim to set you free, not enslave you. You can gain perspective on the focus of your business by viewing it in the light of whether it is developing your asset portfolio. Ask yourself the question "Is this work developing assets which will continue to pay me in the future?"

And if you are working simply "for the money" - make sure that you invest that money in assets, rather than just spending it on "whatever". One way or another, it should be your aim that work you do provides continued benefit, rather than once only.

A controller of good, high quality assets is able to make continued profit from them - and sometimes, depending on the asset and the way in which the asset is "put to work", automated revenue becomes possible.

Asset acquisition strategies

Very often, some of the most successful entrepreneurs are those who pursued the most aggressive asset acquisition strategies. A classic example was that of Ray Kroc, the founder of McDonalds, who surprised everyone with his famous statement that he was not in the hamburger business but was in real estate. The burger business was an asset acquisition strategy that enabled McDonalds to control large amounts of real estate in prime retail locations.

This kind of overview and understanding of the way assets work, is a powerful key to success. Have a look at other successful businesses through this lens and see if you can observe the asset strategies that are in motion.

Remember the board game "Monopoly"? This game, although it was never explicitly stated, demonstrated perfectly the power of asset acquisition and the power of making investments that would continue to pay you back. In general, the players who were able to buy the most assets the fastest, stood the greatest chance of winning. The inventors of this game had a real understanding of the way asset control worked, and of the way fortune tends to favour those who play to win, rather than those who just play not to lose.

Owning the bank

Simple methods of asset control and automated revenue are commonplace and are the basis of, amongst other things, many retirement packages, saving schemes and investment practices.

However, although such a system can make you some profit while you sleep, have you considered that you are effectively lending your money to a bank or other organization, who use it to make much more money than you make, some of which they pay to you? They control the asset and take home the big slice of the pie. Although you are the owner of the asset, it is the banker who most effectively puts it to work.

The bank does not necessarily own the money; but the fact that they control very large amounts of money means that they are potentially able to make greater gains.

It can easily be seen that the hidden step is to gain a deeper understanding of assets, how they work, how they can be used most profitably, and how you go about acquiring and controlling them.

Types of Asset

What's really interesting is that assets can take an incredibly diverse number of forms - and that there are a very surprising number of possible assets which most will not have considered. I've created a huge "master list" of types of asset and this can be found in my Complete Guide To Making Money While You Sleep.

I have divided my list of assets into two broad categories - material and non-material. Most people only consider assets to be actual, physical holdings; however, the master key is that it is always non-material assets - such as knowledge, skills, talent, connections and many more - that enable material assets to be acquired.

This is the true meaning behind the commonly heard phrases "You are your wealth" and "You must have mindshare before you can have marketshare".

To take a very simple example, Intellectual Property is a form of asset - and is one of the ones that I use to make money while I sleep. Example of IP include completed writings, musical compositions and recordings, patented inventions, designs and business plans. Note however that intellectual property is typically made possible by study, experience and knowledge, which must be acquired first.

The best thing about intellectual property is that if it is of very high quality, it can continue to generate revenue for life. If Tolkien, Beethoven or Dumas were alive today, they would easily be able to position themselves not to have to work at all, if they so desired.

With intellectual property, it is always a good tip to endeavour to create content that has that "classic", timeless quality - and when you listen to what's on the radio, realize that every time they get airtime, classic old songs are still making money for the owner of the copyright, even many years later.

Another classic, simple example of an asset that many do not consider, is a well-organized database of potential clients or leads.

Creating An Empire Takes Time

A key point to observe is that it always takes longer to make money developing your own asset systems than it does going to work for someone else. The highest quality assets often take the longest or are the most expensive to create; yet have the greatest potential for payback later.

This is one of the greatest challenges for many aspiring entrepreneurs. First, you need to pay the bills! Second, people get discouraged. It's hard to build an asset that doesn't have "immediate payoff", because you can start to question the validity of what you are doing. It can be a challenge to work on a project for a year, all the while being uncertain as to whether it will actually pay off.

Also, others who do not understand what you are doing, may criticize. Friends and family may be too quick to judge. Investors very often want to see quick results. If you are seeking investment, it's always good to find an investor who "gets it". It's also good to have as realistic an idea as possible about what will be involved.

Looking at the world of publishing, one can see that the controller of the asset (typically the publisher) is the one who makes the most money - and this person is not necessarily the author or creator of the asset! Look for example at one of the really big websites that publish content that is contributed by members. The members may make a little money or achieve a little self-promotion; but the big company is the one who uses the asset to generate the big traffic and a high-pageview website that is worth millions of dollars. As mentioned before; it's the difference between going to the bank and owning the bank. We do what we can, and we do what me must - but if you want to get into the "big playground", you need strong strategies for continued asset acquisition and development.

When you look at business through the lens of asset control, it all starts to make sense.

This article is the tip of the iceberg. For a "full download" on the subject of assets, plus a giant list of assets of all kinds including some incredible assets that most people hardly ever consider, more on entrepreneurship, and much more besides - check out my Complete Guide To Making Money While You Sleep.

-- Alex Newman

* * * * * * *

© Alex Newman 2011