In my book Forever Cash, I talk about the word “asset” and how some people (in my opinion) misapply it. Essentially, an asset is something that has value – I’m sure that we agree on that. But for me, the definition should go a little further: an “asset” should be the opposite of “an expense”; it should put money into your pocket and not take money out of it.
So with that definition in mind, what do you think: is a house an asset?
Well, the answer depends on how you use that house. If you use it yourself, then chances are it takes money out of your pocket. If you rent it out, then chances are it puts money into your pocket.
What about a car? Is a car an asset?
Once the again, the answer depends on how you use that car.
For most folks, their automobile goes down in value and necessities like insurance, repair costs, and gas make the cost of owning it go up. Cars cost serious money and each year, it’s worth less.
That’s not what I would define as an “asset”.
But how can you turn your car into an asset? What about renting it out for special occasions?
Obviously, we’re not talking about just any car – folks who rent cars for weddings and proms look for something special – a limousine, a classic car, or even a muscle car. But if you choose wisely, you can turn your car into a cash-producing asset.
Start by evaluating the needs of the area you will be setting up shop in. Are there multiple local schools that stagger out their proms over several weeks? Are there lots of people looking to get married or engaged? Are there local wineries or tourist destinations that attract people looking to relax and let someone else do the driving?
A luxury car rental service can be a great way to generate a passive income – especially if you can get someone else to do the driving. Just don’t forget to get the proper insurance!