Trophy Assets

hershey

I’m not sure where I originally heard “trophy assets”, but I have been thinking a great deal about them lately. Here is how I have defined a trophy assets for my own purposes:

  1. An asset you would want to own for life.
  2. An asset that generates more income and increases in value over time.
  3. An asset you’re proud to own.
  4. An asset you would eventually want to pass on to your children.
  5. An asset you would not sell when times get bad.
  6. An asset you’re willing to trade your time to build, create, acquire.
  7. An asset you’re willing to sacrifice to acquire because of the long-term wealth that will be captured.

A few examples of trophy assets might be:

Hershey Stock
Brown-Forman Stock
Union Pacific Stock

These businesses are “trophy assets” and owning shares of these companies is a way of acquiring your own trophy asset(s). These are businesses you would want to own for life. You wouldn’t want to sell these shares because of the incredible compounding power they have over time. You would want to pass these shares on to your children.

Another trophy asset might be a great rental property in great area. Remember, one of the rules for a trophy asset is that you must want to own it for life. This property should appreciate and generate more rental income for you as time passes. You can live off of the income and pass the property on to your children.

Finally, your business could and should be a trophy asset. Does your business meet the 7 criteria listed in this article? If so, it IS a “trophy asset.” If not, it is your job to transform it into one.

Not all assets are “trophy assets” and it is important to filter assets accordingly. The reason why is because the more trophy assets you own, the more wealth your family will ultimately enjoy. Filtering assets through these “trophy asset” rules also helps direct your focus going forward. Are you using your time to build or acquire trophy assets? If not, you’re probably not using your time effectively.

Take some time to list all of your assets. Would they be classified as a trophy asset? If not, can the asset be transformed into a trophy asset? Two “no” answers to these two questions is an indication, you might want to sell the asset. If the asset will never be a trophy asset, it might be a distraction. It would be better to own ONE trophy asset than FIVE non-trophy assets.

Trophy assets make our lives better. Non-trophy assets don’t.

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