Assets vs. Investments: What a Mom Should Know

Hey there, powerhouse momma! 💥 Today, I want to dive into two words you’ve probably heard tossed around when it comes to money: assets and investments. They might sound like they’re part of the same family, but trust me, understanding the difference could be the key to building wealth for your family.

Let’s get real: most of us already own assets. Think about your house, car, or that brand-new sofa you bought last year. But here’s the twist—just because you own something doesn’t mean it’s helping you financially. It might even be doing the opposite! 😳 So let’s break down the real difference between assets and investments and figure out how to make them work for you, not against you.

Alright, let’s start with assets. And let me be totally honest with you: an asset is simply something you own. That’s it. It’s something that belongs to you, but here’s the catch—it doesn’t necessarily help you make more money. In fact, many assets lose value over time. I know, ouch! 😬

Let’s think about it this way. You might own a car. That’s an asset. But from the moment you drive that shiny new car off the lot, it starts losing value. This is called depreciation. Depreciation is just a fancy word for, "it’s worth less today than it was yesterday." So, while your car may be useful, it’s not helping you grow your wealth. Instead, it’s costing you in terms of maintenance, insurance, gas, and more.

Common examples of assets that depreciate over time:

- Your car: It’s handy, sure. But cars lose value the longer you have them.

- Appliances and furniture: That sleek fridge or comfy couch? They might look great, but they’re not going to be worth more in five years. 😬

- Technology: Phones, laptops, TVs—they all become outdated pretty quickly, right? Next year, there will be a newer model, and your once fancy tech will be worth much less.

So, while assets are nice to have, most of them decrease in value the longer you own them. They might still serve a purpose, but they’re not going to help grow your family’s financial future. 🚫

Now let’s flip the script and talk about investments. An investment is something you own with the intention of making money from it. Unlike assets that depreciate, investments are designed to increase in value over time. 🙌

When you invest, you’re not just owning something—you’re putting your money into it because you expect it to bring you financial returns. It’s like planting a money seed that you water and nurture, knowing it’ll grow into something bigger.

Here’s where it gets exciting: investments don’t just sit around looking pretty. They work for you, growing and generating income even while you’re doing something else (like chasing the kids around or finally getting that me-time bath 🛁).

- Stocks: You own part of a company, and as that company grows and profits, your stock becomes more valuable.

- Real estate: When you buy a property to rent out or sell later for a higher price, you’re making an investment.

- Mutual funds and ETFs: These are bundles of investments that grow over time, giving you a chance to profit as the market improves.

Now, I’d be doing you a disservice if I didn’t mention the risk involved with investments. As much as we expect them to grow, the market can go down. And yes, you might lose some—or even all—of your money depending on what you invest in. This is why it’s so important to be aware of the risks, educate yourself, and spread your money across different types of investments to lower that risk. Investing is powerful, but it’s not without its ups and downs.

Here’s the major lightbulb moment: assets and investments can sometimes overlap, but they aren’t the same thing. Just because you own something doesn’t mean it’s helping you grow financially. And this is where a lot of people get tripped up.

You might own a house or a car, but unless those things are actively making you money, they’re not investments. In fact, they could be costing you in ways you didn’t even realize. Ouch, right? 😱

- Your house: This is a big one. Many people think their home is an investment, but unless you’re renting it out or selling it for a profit, it’s actually an asset that depreciates over time. Why? Because you’re pouring money into it for mortgage payments, repairs, and upkeep. Yes, your home might increase in value, but you’re still putting more money into it than it’s returning most of the time.

- Your car: Another asset people often mistake for an investment. A car might get you from point A to point B, but financially, it’s depreciating every day. It’s not something you can sell for more later, and it constantly costs you money in terms of maintenance and gas.

- Stocks and bonds: These are things you put money into because you expect them to grow over time. You don’t just hold onto them for the sake of having them; you own them with the goal of making more money in the future.

- Rental property: If you buy a house to rent out, now we’re talking about an investment. It’s generating income every month, and hopefully, it’ll be worth more when you sell it down the road. That’s a win-win! 🏡

When you’re making decisions for your family’s financial future, knowing the difference between assets and investments is huge. Many families get stuck in the cycle of buying assets that actually drain their finances over time—whether it’s a bigger house, a nicer car, or more stuff to fill up the house.

Momma, you’ve got what it takes to create a future where your money works for you, instead of the other way around. Understanding the difference between assets and investments is your first step in that direction.

It’s time to stop spending all your hard-earned cash on things that depreciate and start putting it into things that can grow your family’s wealth. You deserve financial freedom, and now you know how to get there—one smart investment at a time. Let’s make your money work as hard as you do! 💪

Now it’s your turn, gorgeous! Did you find this article helpful? Share your thoughts with us in our Facebook group!

Until next time, keep mastering your money game with ease and grace, like a dame!

Hugs,

~Viki