What Is Your Most Valuable Asset?
It probably isn’t what you think! Most people may answer, “My home, of course.” Not really. Your home may possess significant dollar value, but we believe your most valuable asset is your income. Why? Your income is the asset that fuels financial growth and security.
Let’s dig a little deeper into this thought. Your ability to earn an income is fundamental to maintaining your lifestyle, covering daily expenses, and achieving financial goals. It’s the cornerstone of your financial well-being. That is also why your number 1 goal should be to avoid or minimize anything that detracts from its value.
Debt Reduces Your Usable Income
Specifically, we’re referring to debts and loans. They can greatly diminish the full benefits of your income. When you have debts and loans, a portion of your income is committed to repaying these obligations. High-interest debt is especially challenging, if you want to build wealth over the long term.
For example, if you have large credit card debt or burdensome car loans at high interest rates, the dollars spent on monthly installments could otherwise contribute to your savings and investing. People with high credit card debt often experience financial stress, which may limit their ability to seek new employment or take advantage of new opportunities. In other words, it cuts into your money available to enjoy life today.
With a significant portion of your income going towards high-interest debt repayment, it may be extremely challenging to put sufficient money aside for retirement. Not only can high-interest debt compromise your ability to attain financial peace today, it can create real obstacles to your long-term financial security.
Optimizing Your Income as an Asset
Successful people create a monthly plan around their income. It may be difficult for people to consider their income as an asset, but it is the most valuable, money-generating asset you own. When you consider your future earning potential, or your capacity to generate wealth over time, the value of this asset comes into focus. As your income increases over the years, your ability to save and invest for the future grows as well. And this growth can be alarmingly fast. But it requires financial planning.
At Isakov Planning Group, “Planning” is in our name and in our mission. We believe that planning is the key to getting the most out of your income.
Do you know someone who might benefit from a free, no-obligation consultation? Refer us to your own network of friends, relatives, and colleagues! Contact us today.