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Real Assets Vs. Financial Assets - YouTube
Channel: ClayTrader
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a real asset verse a financial asset
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what's the difference how do they work
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together I'm clay let me explain
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[Music]
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whether you're talking economics or more
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so finances in general this is a very
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foundational concept that you need to
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know because in all actuality everything
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is built from the ground up no pun
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intended as you're about to see as far
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as these two concepts are concerned so
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first off let's talk about what a real
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asset is well let's focus on the word
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real real means that this is literally
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some sort of factory so we have the
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smokestacks
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it is literally land so you have you
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know some more those are supposed to be
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trees but I'm gonna call those houses so
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you have more land houses but point
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being real asset is land its factories
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its machines it's also this to knowledge
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so if somebody's got a well I know how
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to do fill in the blank then that would
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be a real asset because that is you know
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knowledge that's probably of the most
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powerful assets out there but it would
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be considered a real asset so that's
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what a real asset is all about literal
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physical things and these literal
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physical things can be used to produce
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they have a productivity aspect to them
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to generate things for an economy so in
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this situation let's just say that all
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this promise me you're not going to make
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fun of my artist abilities there but in
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this situation let's just say that these
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real assets so you have the factory you
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have that that the workers you have the
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knowledge is all for
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oh my that's a car okay so this real
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asset is going to work together to form
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a car but here's the thing okay that's
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great you have these real assets you
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have all this stuff but what do you
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actually need to take these real assets
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and actually form a car well you
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actually need money right I mean you
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need somebody you need to pay employees
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you need to actually build the factory
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you need to actually pay for the
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equipment that that takes money so sure
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to get a car you definitely need all of
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this but in order to have all this you
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need money and that is where this next
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part comes in and this is where a
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financial asset comes in a plane now as
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far as a financial asset there's nothing
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there in the sense of you know there's
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not dirt there's no land
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there's no wow I'm looking at I'm
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standing in the factory it's literally
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just pieces of paper but what these but
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what these pieces of paper represent is
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where all their power comes from I want
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to say that again
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they're just pieces of paper but what
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these pieces of paper represent is where
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the power comes from and in most cases
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these are stocks or bonds now there can
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be other types of financial assets but
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for simplicity sake stocks and bonds and
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what does the stock and bond actually
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doing well a stock and bond is allowing
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Bob over here say you know what Bob is
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saying he doesn't know how so he he does
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not know how but what does he know how
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well he doesn't know how to make a car
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he doesn't happen now
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he doesn't have the employees he doesn't
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have the factories he does not know how
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but what he does know is you know what I
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want to make some money from cars so is
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this possible for Bob who has no
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knowledge he has no factory he has no
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machinery he has nothing can Bob still
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make money from the production of cars
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yeah
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he can't make money how can Bob make
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money well he's going to come over here
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and get involved with the financial
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asset and the financial asset in this
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case some sort of stock or bond is going
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to be what does this it's going to give
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the company the real asset the money
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that it actually needs to make the car
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so do you see how that works
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it's almost like a chicken and an egg
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type thing well what what's more
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important they're both very very
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important because like said you can't
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have the car unless you have the real
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assets but just because you have real
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assets well I mean that still takes
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money to take advantage and utilize
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those real assets and that's where
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financial assets come into play and
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that's where Bob or URI when you invest
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into the stock market for example if you
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know what the stock market is and you
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buy a stock you are getting a financial
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asset and that stock that financial
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asset in one form or another is helping
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to finance some sort of real asset so if
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you buy a stock in Apple for example
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Apple is a company right they have
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buildings they have products they have
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employees they have all that they have
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machinery so when you're and getting
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involved in Apple when you were buying a
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stock an apple you are I mean I don't
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know how to make a smart phone I don't
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know how to do a computer I don't know I
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don't have employees to do that I don't
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have machinery but I can still make
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money off of Apple because I can get
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involved with the financial asset which
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is help benefiting the real asset going
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back to the whole chicken and egg thing
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how does this all actually work together
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well the true sequence pretty much goes
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like this there is an idea first
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so that is where this all starts putting
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this aside you just got to have an idea
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but an idea
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well it's only as good as the assets
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that are attached to it what do I mean
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by that well first off just because you
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have an idea you have to make sure do
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the real assets exist to be able to make
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that idea possible I mean you could have
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the greatest idea ever but if there's no
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literal land factory employees knowledge
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of how to do it because there's a big
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difference we now have an idea and I
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have a knowledge but if there's none of
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this well then the idea that's what we
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would call not a very good idea for the
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time being but even if okay yeah there
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actually is real assets available to
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make that idea come true well then you
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still need at that point where you drop
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down in the financial asset so sure in
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some cases you could say well with the
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most important thing is the real asset
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to which I would agree but you can also
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make a very very powerful argument that
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well that that's still pretty worthless
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if you don't have any money to actually
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get the real asset in our example you
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don't product produce the car but that
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is how real assets work and what they
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are real is very literal there is some
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sort of real piece of dirt land
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machinery employees knowledge and then
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financial is just pieces of paper but
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those pieces of paper are very powerful
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because they allow the real asset to
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spit out a product and then they allow
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you and I you know everyday people to
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make money off of something that really
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we have no knowledge or capability to do
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on our own so that's how you would
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explain it that's how it all works like
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I said very basic very foundational
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concept where you really need to
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understand how this works because from
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there that is where all other you know
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you can economical and you know just
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kind of Business and Finance things you
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know arise from if you do have any other
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ideas for these sorts of clay explained
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videos please in the comment section
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I'm all for ideas let me know if you
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enjoy the video click it to click the
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like button subscribe to the channel and
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I'll see you back next week first off
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thanks so much for watching the entire
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video real quick before you go I want to
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invite you to a live webinar web class
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training workshop online event whatever
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you want to call it but it will be
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live revealing to you what I discovered
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that has allowed me to transform myself
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from being an employee to being my own
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boss
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including how I had only one losing day
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out of 73 days in total I'm going to
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cover three keys that have helped me
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unlock profitable consistency within the
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markets the first key is super-weird but
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in a productive type of way the second
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key is super awesome because it quite
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literally is wired into our DNA as
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humans making it very easy to use but in
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a cruel way this becomes a pitfall for
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many traders I'll explain it all though
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including how to avoid the pitfall that
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it creates for some and yeah the third
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key when you hear it sounds way too good
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way too good to be true but it's not and
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I'll show you how it all works then at
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the end I open it up for a
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question-and-answer session that is
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again totally live even if you can't
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make the live session please still sign
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up as it will be recorded and you can go
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back and watch the replay then I will
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send you click the image on the screen
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or click the link down in the
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description box so you can get the date
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and time and claim your spot which I
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should know is limited due to the fact
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that this truly is a live event if you
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have any questions let me know if not
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I'll be seeing you soon
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