The other day while power walking, I listened to Justin Bieber’s Intentions. Here are the lyrics:

Picture-perfect, you don’t need no filter
Gorgeous, make ’em drop dead, you a killer
Shower you with all my attention
Yeah, these are my only intentions
Stay in the kitchen, cooking up, cut your own bread
Heart full of EQUITY, you’re an ASSET
Make sure that you don’t need no mentions
Yeah, these are my only intentions

So, what lessons can the multi award winning and 150 million record selling artiste teach us about investment? What is equity or asset, and which is preferable within the context of a relationship? Let me break things down with two personal examples.

A few years ago, I invested in a tech company and was allotted shares – EQUITY. Now, when you take equity in a company, there’s something you should be mindful of. You only profit if the company remains valuable or increases in value over time. A lot of work goes into this and sometimes, as an investor, you can contribute by lending your expertise or networks.

In an equity scenario, you may cash out in future, in two ways. You can earn annual cash dividends from the company. Then, by the time you’ve recouped your original investment, your stake is reduced and everything thereafter is pure profit. A second option is when another investor buys you out at a much higher valuation. Your 1x can become 5x, 10x or even 100x. You essentially earn multiples of what you originally put in.

The main parallel between equity and a relationship is this – EQUITY requires a lot of work to retain and increase value. It’s very high maintenance and very high risk. You’re not sure if it will be worth it in the end.

On the other hand, some types of ASSETS, like gold or land, have inherent value. Even when you don’t work on them or add any additional value, they appreciate over time.

A few years ago, I bought a piece of land that’s now 2x its original value. Even though I built nothing on it, its value kept rising. That value can be passed on for generations to come, should my heirs choose not to sell. They can even unlock the value at any time while still retaining the asset, by mortgaging it for liquid cash.

Within the context of a relationship, an ASSET is that jewel of inestimable value that has inherent and enduring worth. You treasure it and are hesitant to lose it.

Do you want to learn more about equity, assets, real estate and tech investing? Then you should take my investment course.

Thank you for reading.

[bctt tweet=”What can @JustinBieber teach us about investing? Read this article to find out.” username=”subomiplumptre”]