If you are into finance, then you probably have a good understanding of each asset class together with their pros and cons. Yet, as Robert Kiyosaki explains, in school we are taught little about money, meaning that many people are not ‘in the know’ about asset classes and their functions, even thought it’s a crucial cornerstone in your financial wisdom dictionairy if you are interested in building wealth. In essence the four asset classes are:
- Equities/Stocks: i.e. owning a piece of a company.
- Fixed Income/Bonds: i.e. government or corporate bonds.
- Cash/Cash Equivalents: i.e. money stashed under your mattress or money market instruments.
- Real Estate/Commodities. i.e. property or precious metals.
Each asset class has their own particular set of characteristics. Some are more liquid then others for example. For more details on each asset class this Investopedia article and make sure to watch Robert Kiyosaki views about the four main asset classes and which ones he believes you want to be in!
