Understanding Assets: The Key to Building Financial Success

If you want to grow your wealth and make smart money decisions, one of the first things you need to understand is assets. At Jordan Credit Union, we believe that learning the basics of assets can help you take real control of your financial future—and it’s easier than you might think!

Let’s explore what assets are, the different types, and how they can help (or hurt) your financial growth.

Appreciating Assets: Growing Your Wealth Over Time

Appreciating assets are items that typically increase in value over time. A great example? Real estate.

• Buying a house can be a strong investment because, historically, homes gain value as years go by.
• However, real estate isn’t always “liquid”—meaning it’s not easy to sell quickly if you need cash fast.
• Key takeaway: Investing in appreciating assets can help you build long-term wealth, but they often require patience.

Depreciating Assets: Useful, but Losing Value

Depreciating assets are items that lose value over time, even if they’re still useful. A common example is a car:

• The moment you drive a new car off the lot, its value starts to drop.
• On the bright side, a car is easy to sell quickly if you need cash—just expect to sell it for less than you paid.
• Key takeaway: Depreciating assets can still be important and necessary (hello, transportation!), but they shouldn’t be relied on as investments to grow your wealth.

High-Risk Assets: Big Rewards or Big Risks

Then there are high-risk assets like collectible trading cards, cryptocurrencies, and digital assets:

• These can dramatically rise or fall in value.
• They offer the potential for big gains, but they also come with big risks.
• Key takeaway: High-risk assets can add excitement to your portfolio, but they shouldn’t be your primary plan for building wealth. Always diversify and make sure high-risk investments are a small part of your overall financial strategy.

Why Knowing the Difference Matters

Understanding the types of assets you own—or plan to invest in—makes it easier to:

• Create a balanced financial plan
• Manage risk wisely
• Grow your wealth steadily over time
• Make smarter buying and investment decisions
  
  

At Jordan Credit Union, we’re here to help you build a strong, healthy financial future. Whether you’re buying your first home, upgrading your car, or curious about investing, our team is ready to support your journey.