The Top 10 Assets You Need for a Better Life

There’s no doubt that increasing your net worth will, in general, increase your quality of life.  This endeavor may involve a combination of the following steps:


  • Saving more
  • Spending less
  • Investing


However, the assets that contribute to improving the quality of your life go far beyond money or even financial assets like stocks and bonds.  Time, for instance, is arguably the most important asset since everyone is given the same 24 hours a day and nobody lives forever.  Here’s a non-exhaustive list of the major types of “assets” everyone has in life:


  1. Money
  2. Financial Assets
  3. Time
  4. Real Assets
  5. Knowledge
  6. Creativity
  7. Social Networks
  8. Physical (Health and Energy)
  9. Mental (Heath and Energy)
  10. Grit


Often, in order to increase one asset (say Money), another asset has to be sacrificed (say Time, Physical, and Mental.)  You need to be mindful of the trade-off involved whenever you commit a significant amount of any of the above assets for the pursuit of another.


Asset 1: Money


Money is likely the most talked about asset in the list.  It’s also the “basket” that we’ve likely been conditioned to put all of our eggs in prior to reading this article.  That’s understandable since money has become the de-facto medium of exchange in many cultures over the past few centuries; a few assets on the list can be directly converted from one to another but several can be converted to and from money.  For example, time can be converted to money by working, and money can be converted to knowledge by paying for a course.


Asset 2: Financial Assets


“Financial Assets” is a broader category that includes money as well as stocks, bonds, options, and other paper assets.  If the asset exists conceptually and can traded many times per day, then it’s likely a financial asset.  When most people speak of investing, they’re usually referring to purchasing financial assets with money and reasonably expecting that they’ll appreciate in the future.


Asset 3: Time


Time (NOT Money) is the most precious asset since everyone receives the same 24 hours everyday and is lost forever once spent.  We also cannot “stop” the passage of time so it’s imperative to make the most out of every second of our lives, converting it to any of the other 9 assets as effectively as possible.  The time you spend, whether to read this article, learn a new skill, impress the boss by volunteering overtime, take some well deserved rest, etc. will be gone forever so make sure you’re putting it to the best possible use.  (Even thinking about how to spend your time takes time itself so try not to overthink either.)


Asset 4: Knowledge


Knowledge can be split between Education and Experience.  Education includes “formal education” (degrees, certifications, etc.) as well as informal knowledge gained from books, articles, non-degree courses, etc.  Experience, on the other hand, is the “education” you receive through life itself rather than a book or class.  It’s also where you apply the book knowledge you gained from your education as skills in the real world.  It goes without saying but I highly recommended that you review your “knowledge assets” periodically to keep them fresh in your mind in the event you need to tap into them for future endeavors; the program Evernote does a great job organizing the knowledge you acquired over the years.


Asset 5: Real Assets


These include real estate, precious metals, and the businesses you’ve started or own.  They are probably the first things that come to mind when you think of the word “asset”.  These are tangible (non-financial) entities that gradually appreciate in value over time and/or offer periodic cashflow (in the case of rents from real estate or income from businesses.)


Asset 6: Creativity


Creativity includes both your skill for synthesizing new ideas as well as the portfolio of original ideas you’ve come up with (whether they’re informal notes scribbled on paper or in Evernote or something official like a patent.)  Hedge Fund Manager James Altucher confesses that ideas, NOT money are the currency of life.   New and creative ideas are what ignites technological and social progress, not an abundance of money.  Money can’t directly buy creativity (but you can certainly pay to employ artists and other creative professionals.)


Asset 7: Social Networks


These are our relationships with other people including friends, family, and acquaintances.  Include those that you only deal with online like followers, fans, online friends, etc. in your circle too.   Sometimes, we might request the help of our social network to accomplish a goal.  Other times, we find fulfillment in giving back by adding value to our network without asking for anything in return.  Like creativity, money doesn’t buy us relationships, at least not real ones.  Those periodically reciprocated actions of adding value is what maintains genuine relationships.


Asset 8: Physical Health and Energy


How well our physical bodies are functioning is crucial to how long we’ll live and directly influences how well we enjoy life.  Being in poor physical health or depleted of energy will adversely affect our quality of life regardless of our net worth.  Remember to invest some time and money in your physical body daily by eating and exercising well.


Asset 9: Mental Health and Energy


This includes your happiness, attention, motivation, willpower, etc.  Like your physical health, it’s nearly impossible to enjoy a high quality of life if you’re mentally depleted (even if you’re a millionaire.)  Make it a habit to not waste your precious mental energy and willpower on small problems and things outside of your control.


Asset 10: Grit


In my culture, we call this 吃苦 (literally means “eating bitterness”) but I like to think of it as “how much sh*t you can put up with before you break.”  Everyone wants to live the good life but in order to achieve that, we must be willing at times to work hard and endure temporary hardships.  I also think of “eating bitterness” as an investment for my future: sometimes, you gotta take the bitter medicine today so you won’t be forced to take it in much larger doses in the future.  For example:


  • Getting that college degree so that you can pursue a better and higher paying career in the future.
  • Saving money for a comfortable retirement where you can take multiple vacations every year instead of spending your leftover money today on beer and sports cars.
  • Having surgery to remove a tumor right away instead of procrastinating many years and having it turn into something malignant.


Opportunity Cost


Whenever we pursue a goal, we may need to sacrifice certain assets in order to accomplish it.  Opportunity cost can be thought of as the assets (such as time, money, physical/mental energy, etc.) that we sacrifice in this process.  Not all assets are valued the same by everyone and it’s gonna be a lifelong journey determining the best way to exchange one asset for another that’ll maximize our life’s fulfillment.


Diminishing Returns


When converting one asset to another, the amount that’s yielded isn’t necessarily linear in the amount of the first asset.  Take, for example, the notion that money will buy happiness up until an annual salary of around $75,000 US Dollars.  Let’s say $75,000/year yields ONE unit of happiness.  Doubling it to $150,000/year will yield far less than TWO units of happiness.  Recognizing diminishing returns is a crucial part to minimizing opportunity costs and optimizing the use of our limited resources and assets.


Final Words


While “assets” are traditionally thought of as anything that has a reasonable expectation of bringing in positive future cash flow or capital appreciation, I like to think of them in broader terms:  stuff that can be expected to improve our quality of life.  After all, we work hard to earn lots of money in order to buy a more desirable lifestyle in the future.  A sensible balance of the aforementioned 10 assets is crucial to maximizing our life’s fulfillment.


Are there any other assets you deem crucial that I’ve missed?  Please share them in the comments!

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