Do you know what a real asset is well It's a physical asset that has real Underlying value based on what it can do Or be used for these assets are often More stable than financial assets like Stocks and when inflation is high these Real assets tend to outperform the Financial assets today we're going to be Exploring five real assets that might be The perfect source for Passive cash Flows in 2023. also this video is Sponsored by fundrise but more on that Later so there's three types of assets Out there you have real assets you have Financial assets and then you have Intangible assets let's cover the Differences well most of us are familiar With financial assets a liquid asset That derives value from underlying Ownership in something else in the case Of stocks this would be a real company However Financial assets include stocks Bonds ETFs and even good old cash now Intangible assets on the other hand have What's called a non-physical value an Example of this could be a company's Brand recognition a patent or a Copyright so yes there's certainly value There but you just can't really put your Finger on it and then real assets have Physical form in reality this particular Reality not a metaverse or anything like That because these are real tangible Things in this real world some examples
Of this include buildings as well as oil And even livestock however it's Important to understand that not all Real assets are a source of cash flow Something like gold is certainly a real Asset but it's a non-yield bearing asset So you're not going to make any money While you own it the only way to make Money is to sell it for a higher price Later on so instead we're going to be Focusing on five real assets that cash Flow let's jump into number five now so The first real asset we're going to Cover is Timberland let's start by Defining what it actually is well Investing in Timberland means investing In land that produces Timber also known As Lumber or good old-fashioned wood and With this type of investment you're Looking to benefit from the overall Increase in demand for lumber that is Expected over time as Society grows for Example when lumber prices skyrocketed In 2021 Timberland investors cashed in However this commodity or raw material Is susceptible to boom and bust Cycles Just like we saw in 2021 that being said In the long run we are simply not going To stop building things the long-term Demand for lumber should remain high When you invest in Timberland you can Make money in two different ways number One you can cut down and sell the actual Timber on your land or of course rent it
Out to a logger and then number two the Land itself has value and that value is Likely to go up over time so a popular Strategy among Timberland investors is To buy Timberland in the outskirts of Booming areas with the goal of cutting Down that timber selling it to a Logging Company and then selling that cleared Land to a developer for a hefty profit The next real asset on our list is Equipment and these are tools designed For a specific purpose on a small scale This could be something like a lawnmower And on a big scale this could be Something like a caterpillar dump truck Well here's the thing millions of pieces Of equipment all over the world are Simply rented and there's an owner out There who's earning a rent check every Single month many of which are in a Passive manner for example in my Hometown of Upstate New York we have Casale Rental this company rents out Tools and equipment large and small for Example here's a 13-foot scissor lift That's being offered for rent at 145 Dollars per day well what does a piece Of equipment like this actually cost This particular scissor lift is going to Cost you around fifteen thousand dollars Gently used so let's say for example you Bought one yourself and then rented it Out well if you simply rented this out For five days a month which would be 17
Utilization which is extremely low you'd Be making 725 dollars per month from that one Equipment rental think about that for a Second eighty seven hundred dollars Generated in one year from a fifteen Thousand dollar investment that right There is a cash on cash return of 58 However to be fair we're not factoring In repairs maintenance Transportation Insurance and many other important Factors equipment can be a fantastic Real asset to own and then renting it Out can be a great business in and of Itself hey guys before we cover the next Real asset I recently found out that About 89 of my viewers on this channel Are currently not subscribed to the YouTube channel that makes me really sad So if you could take two seconds and Subscribe hit that Bell and then click On all notifications so you don't miss a Single video guys that would honestly Make my day so thank you so much so Here's a question what natural resources Are you allowed to legally own in the United States to answer this question I Ended up on the US Department of Natural Resources Revenue data private Individuals and corporations are allowed To own both land and the oil gas oil and Other minerals found below the surface Fun fact Water Resources like Groundwater or Springs can also be
Privately owned too but how would you go About actually investing in a natural Resource let's go ahead and cover an Example looking at oil you'd be looking To make a direct investment into an oil Well and this would most likely be Accomplished through a private placement Where you would make a direct investment Into an oil drilling project and while You can certainly invest in oil through Things like stocks ETFs and even Futures Keep in mind that these are not real Assets these are Financial assets if You're looking for real tangible oil Investments be sure to check out the Great states of Texas North Dakota and New Mexico as most of the oil reserves Are here next up on the list perhaps the Most well-known real asset of all time None other than real estate the value is Clear it provides to you or someone you Rent to a physical shelter unlike a Stock you can go out and physically find Real estate in the real world and even Make improvements to it which often Increases the value however in order to Buy something like a rental property Today you're going to need about fifty Thousand dollars and a Stellar credit Score not to mention mortgage rates Being as high as they are now have Raised the bar even higher for getting Into something like a rental well Today's video sponsor could be the
Perfect solution for getting exposure to Real estate within your Investment Portfolio fundrise provides investors With simple access to Alternative Investments through cutting-edge Financial Technologies and right now the Demand for real assets is surging and This is spilling over into the Alternative Investments realm because Many alternative Investments are real Assets themselves however in the past It's been difficult for average retail Investors to gain exposure to this Alternative investment category well With fundrise the sign up process takes Minutes and there's no middleman so the Fees are often lower than other Alternative investment options out there So if you want to utilize fundrise's Industry leading fintech platform be Sure to visit fundrise.com Ryan Scribner Or use the sponsored Link in the Description below so finally we have Farmland the literal backbone of the United States of America with this type Of investment you're able to make money In least two different ways number one You can rent the land out to a farmer or You might decide to cultivate the land Yourself and grow something then of Course you could sell that product to Generate income and then the second Means of making money with Farmland is That the land itself tends to go up in
Value over time just like with Timberland and other types of real Estate and increasingly Farmland is Being bought out by investors who then Rent that land back out to the farmers Instead of owner operated Farmland Investors for example Bill Gates owns More Farmland in the United States than Any other person or entity out there he Owns a total of 242 000 Acres of arable Land worth around 690 million dollars so Maybe consider investing in the green Stuff yourself Mark Twain put it best When he said buy land they're not making It anymore so a Common Thread among Assets on this list has been what you Can do with land you can build Structures on on it allowing you to rent Those structures out to other people you Could sell the resources that are Already on the land for example Timberland or you could grow food on Your very own land or simply rent it out To a farmer this makes Land truly the Ultimate real asset be sure to subscribe And hit that Bell for future Notifications as I have an upcoming Video about five steps to make your Portfolio inflation proof in 2023 that You don't want to miss once again if You're looking to invest in alternative Assets be sure to check out fundrise via The sponsored link down below thanks so Much for tuning in and as always I hope
To see you in the next video
