Assets are primarily designed to create income. They also can reduce expenses, but you typically want assets that boost your cash flow.
An asset produces income over and over again, while an expense should generate income one time or for a short period. A digital ad campaign, for example, is an expense that should create income, but you’ll need to keep buying ads to continue generating revenue. On the other hand, if you purchase an apartment building and rent it out, that creates revenue repeatedly.
When you’re considering which assets to invest in, look at how you can partner with the government. When you invest in things the government favors, you’ll often create an income-producing asset and reduce your taxes.
Not all expenses are bad, but ensure they provide good ROI. Having solid bookkeeping and reviewing your expenses regularly is important.
Make your money work for you and optimize your tax situation for long-term success. To find out how to do this, book a call with the team at TFW Advisors® today!