My mentor defines an asset as something that is putting money in your pocket on a monthly basis. A liability on the other hand takes money out.
With that in mind he asked me once if the stocks I owned we’re an asset or a liability. I instantly said asset, but the more I thought about it, the more I wondered.
I decided to take a look at the stocks I had bought through the Stash app and I was surprised to find most of my stocks paid me 0 in dividends. I then found one that paid a small percentage in dividends but the expense for management of that stock was nearly double what it paid in dividends!
In my opinion, owning a stock in a company is not necessarily an “asset” especially since the price of stock fluctuates.
The only stocks I consider assets, and most of the ones I now invest in are dividend paying stocks only.
Interested to know if anyone else has an opinion on this?
