JohnRunchey.com

An asset is something that is expected to be worth more in the future than it is worth today. At least by my definition. Some would call things such as your car an asset; a depreciating asset, to be specific, because it will be worth less in the future, rather than more. I don’t consider declining value items as assets, as they aren’t a building block of your financial portfolio. Twenty years from now that Tahoe in your driveway won't be paying for your retirement. So don't call it an asset.

Research shows that asset allocation is the single biggest determinant of the investment performance you can expect to achieve over the long haul. So, in plain English, what exactly does ‘asset allocation’ mean? It sounds like a complex investment term that will be hard to understand. Is there any hope for the rank beginner to ‘get it’? Should you stop reading, shut down your pc, and turn on American Idol instead?

Heck no! This isn’t difficult, it’s actually quite simple. Let’s start from the beginning by defining the terms ‘asset’ and ‘allocation’.

 Saving and investing money seems easy and straightforward to me; it certainly isn't a challenging process. Yet to many, investing appears a difficult, mysterious process that only some can succeed at, or even bother trying.
 
I wonder is this due to just a lack of understanding, or is it due to our brains being 'wired' completely differently - one person excelling at math, while another is a 'natural-born' artist. I can't draw worth a crap, never got past stick figures. Is money sense an equivalent type of skill?