Written By Awadesh Nagar
With the advent of technology many new age assets are grabbing attention of investor. Few based on new technology like block chain etc. are being seen as asset of future and new way of growth.
However, investors are still not sure of such assets. Few are testing water and others have already gone thrugh ups and down. It is important for investors to understand what classifies as an asset and what kind of instrument can sustain the test of time.
First asset is something which can create cash flow and generate income or represent any such asset. Like any residential and commercial property has potential of generating rental income. Stocks and mutual fund represent some business asset which is working to generate cash. E,G stock of reliance hold value because it has petroleum, telecom and retail business generating money for shareholder.
Value of stock is determined based on income generation capacity of underlying business. Secondly it is possible to identify ownership/ creation of asset or institution. Like Indian rupee is issued by RBI. It is technically a promissory note issued by RBI signed by governor with promise to pay. RBI has a process for issuing any currency and it is backed by some gold or other assets.
Any technology itself can’t be asset it is used for facilitating business. An asset has to reflect some goods or services being produced. So, any such instrument not representing income generation or have institutional framework will not stand test of time. Matured governments know this fact and that’s why they either ban or discourage such instruments.
About Awdhesh Nagar:
Awdhesh Nagar is experienced banking and finance professional. He has goodknowledge of economics and business-related matters. He currently runs his own organisation by the name ‘finance edger’ which advises more than 300 clients on their personal financial planning. Awdhesh is on mission to improve financial literacy. He considers himself responsible for financial wellbeing of his clients. In past he has worked with organisation like Citigroup, GE, Standard Chartered, SREI at senior level position Awdhesh has also worked for ‘Jaipur Smart City’ project of Government of India’ as Financial Expert. He has handled investment, funding and project finance portfolio in these organisations. He regularly visits education institutes as guest speaker and provides his views on budget and economic events on media. Awdhesh has done his B.Com(H) from Sri Ram College of Commerce and MBA-Finance from University of Delhi.
