Investing in Tangible Assets

I’d phrase it differently, however. There is no bad market for investing in tangible assets.

Tangible assets are real, physical, also called hard assets, and include real estate (my favorite). 

Your business, such as your dental practice, is a tangible asset. Your equipment could be a tangible asset if you lease it out. You may invest in real estate properties of different kinds. These are physical as opposed to financial assets.

You may have both physical assets and financial assets as part of diversification in your own portfolio. That's fine, but here’s why I prefer tangible assets over financial paper assets.

Real Estate vs the Stock Market

#1 Tangible assets like real estate provide collateral that backs up your investment. If something goes wrong, you still have something physical and real that you can use to turn the situation around, sell it, or hold on to it.

It is much more difficult for tangible assets to reach a value of absolute zero, unlike Wall Street paper. The stock market has and will continue to have paper assets that reach zero, meaning you lost all the money you invested in that asset.

#2 Tangible assets are much less liquid than the financial markets. This mitigates one’s temptation to react too quickly to any circumstance or have that money be taken out by spendthrift family members or individuals, including oneself. Wall Street paper, however, can be liquidated at the click of a mouse.

#3 Tangible assets grant more control. When I started investing in real estate over 40 years ago, I enjoyed making decisions, creating more profitability, and taking advantage of opportunities directly, all by my own actions, skills, and knowledge.

Of course, managing your real estate investments does take work. It's not as easy as just putting your money with a third-party money manager on Wall Street in stocks, bonds, annuities, or whatever the product of the day is.

It is more difficult to be involved in tangible assets.

The same can be said about a business, however. We choose to build and run a business even though it’s hard work and sometimes difficult. But it provides so many benefits, all within your control.

Real estate assets are similar to businesses in that it takes more work and skills to learn how to invest in them well. Furthermore, investing in real estate in collaboration with others, in order to be more passive, takes additional effort and time. 

But they are the greatest vehicle for leverage outside your business to create more time for yourself while growing and protecting your wealth.

Where else can you go to invest outside of your practice, with similar control and flexibility in all market cycles?

Keeping your wealth in your business is great throughout your career, but what about when planning for retirement? Or when you exit your practice? You must build multiple streams of income and diversification across assets if you are to weather the down markets and take advantage of the up markets.

That’s why I like tangible assets. They can provide security for your wealth and future while diversifying across different assets and strategies if you learn how to invest in them. 

Diversifying your wealth and income streams beyond your practice is a critical step in creating Financial Freedom.

That's why I come back to my premise. No market is a bad market for tangible assets.

Tangible Assets – The Balance between Passive Income and Secure Investments

To invest in tangible assets safely and profitably in any market, you must know how to buy and operate them. If you're not the buyer, you must know someone who can fill that role. This is where you can choose to be an active or passive player in the tangible asset market.

Today, I want to be more passive. I have more capital to invest and less time in my life. I want to keep as much of my time so I invest with other people.

It does take extra work at the beginning to curate a group of people, a circle of influence, and access points that know what they're doing.

And yes, you must still do the vetting and due diligence to ensure your money is best protected, but the payoff is more flexibility and freedom of time. 

You can also perform your own due diligence much more efficiently and thoroughly in tangible assets compared to Wall Street investments.

On Wall Street, you can't get inside the boardrooms. You can't get inside the businesses. You can only read the financial reports from your advisor if you have one. That won’t give you what you need to know. 

Most Business Owners Forget THIS When it Comes to Finances

You've put a lot of time into your practice. You have built up equity in your building, in your patient experience, and in your services. This took many, many years of hard work. It has gotten you where you are today. Congratulations. This is worth celebrating.

But where do you plan to go from here? Why not put at least half as much time and effort into your investment model?

Successfully creating income streams from assets that are not dependent on your trading time for dollars will require a re-investment phase into your skill sets and abilities. 

That's where I see most high-net-worth, high-income professionals miss the mark. They think that because they can or have earned a lot of money over their lifetime, that will somehow take care of their retirement or transition out of practice. Or even allow them to take one, two, or three days off every week without needing the income or dealing with the guilt that they're not doing enough.

But high income does not equal Freedom. Without a plan to translate your ability to trade time for dollars into sustainable, passive income streams, there will be no freedom.  

To achieve your financial goals, measurable milestones must be in place. Traditional retirement does not account for this. They don’t tell you where you should be after 5, 10, 20, or 40 years. They can only say, “If you can keep working, do so… Just in case.”

The default is to work longer and harder in pursuit of more certainty. Continuing to work due to uncertainty, fear, or “just in case” does not cut it for me. And it shouldn’t cut it for you, either. You’ve worked too hard to base something so important on fear.

Tangible assets can provide measurable milestones to financial freedom and beyond via replacement income. If you know how much asset-based income you need to be financial independent of your practice and you have a blueprint to create it – that is the pathway to Freedom.

If you find the right locations, the right assets, and the right people, no market is a bad one for real estate.

You just have to apply some effort to understand how to become a better advocate for your money. I believe you can do this in tangible assets like real estate.

It's your freedom. Freedom is worth the effort.