Managing your Assets

Yeah, this sound quite complex. In the first place, a lot of people aren’t even sure if they even have assets!. In my view, i think everybody does, whether that’s a physical asset, a unique attitude (like this thing they always call PR), liquid assets (like money /cash) or properties. It is important to know that whether you have less or you have a lot of these, it has to be managed.

How do we basically manage our assets? Let’s take for example a bank account. Assume you have 1M of any currency. The issue here is that all your liquid asset is in one account. Fair enough, you don’t want complications, but is it manageable? how do you track where this money goes and for which purpose? and even if you do, how much is it from a categorical or an objective point of view? Ever heard or putting all your eggs in one basket? I used to be in that boat. But there comes a time where you have to diversify. My advise is to designate multiple accounts (or in this case, create new accounts from different banks as much as possible) for different purposes. One account for petty cash or liquidation (meaning, everyday expenses and ready cash), another which house your savings, and perhaps another one which house your saving but for a different purpose like investment and gains or simply redundancy (you never know what happens with banks!). Few weeks ago, in the Philippines, one Bank just simply closed one day, bidding farewell to all its depositor with a smile on their face while saying “bye! just get your money from the insurance, and if your money is beyond insurance coverage, guess what, tough luck!“. Yup, sh*t happens. And we don’t want it happening frequently. Better safe than sorry.

That’s just one example. In my personal case, right now, I have a certain dilemma. I have certain assets in USD, bought from another currency. And boy how much it dipped in the past 2 years!. Now I am contemplating on giving up the policy by May of 2012. Such that my asset has already earned, something close to 4K USD after a holding time of 3 years. Is that enough to cover the loss? I don’t know, and given the circumstances, i don’t think the dollar is going any further up, and even if it does, the  end currency’s strength shall still prevail, and heck it just gets stronger and stronger!. The lesson here is about prioritizing currency which in the end you will be utilizing or the currency that will give the best value for your asset. In this case, my home currency. I admit, bad investment?? No, but bad choice of currency. Why did i indulge to that? Because after the recession, i was hoping the dollar would catch up in the next 2-3 years. I was wrong. It just dipped a bit more, it will somehow pick-up im sure, but with today;s situation, only God knows when. In the time when I was still a regular dude in the employment streets, having USD was such a privilege, it was too damn hard to get a hand of such, unless you are travelling and buying it from the airport (and it is still limited). Fuel that with the anti-money laundering practices in my country, it was really tough, and USD is literally like Gold…. that was then. Now, I believe my home country has a steady supply of these, and the economy is so far catching up. And that is why, dollar is becoming more affordable.

Anyways, going back, so what am I going to do now?, I am going to pull out that money soon and re-invest it to something else. Perhaps a commercial property which will give me some returns soon. Yup, one of the most viable industry back home. That’s another example of managing your assets;, diversifying, making sure that it is well-tended, working for gains and profitability, and avoiding losses.