Earning Assets

  

When a company or individual has assets that just sit there making money for them, they’re called “earning assets.” Ideally, earning assets provide a relatively steady stream of income at little to no maintenance, making them good for long-term "set and forget"-type planning.

Earning assets are investments that will keep on giving, and assets that can later be sold for their inherent value. Yep, your typical stocks and bonds can be earning assets, but also landlord income (which does require more upkeep, though), CDs, and other debt instruments designed to gain interest and/or dividends.

When you hear “make your money work for you,” it’s either someone telling you that you should open an investment account that you don’t already have, or they want you to invest in their startup. Which might be a scam. And, uh...it’s probably a scam. Tread carefully.

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Finance: What is an Asset Backed Securit...7 Views

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Finance Allah Shmoop what is an asset backed security Well

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if you haven't seen our M night channel on directed

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video on Collateral you should It won the Academy Award

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for best finance video frequently confused with a Tom Cruise

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action flick Riveting stuff So why would you see this

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or other videos while other than to see Cem truly

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groundbreaking CG effects like this Because assets backing a security

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our collateral that is the asset itself is the guarantee

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that bond holders get if the money isn't paid back

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or said differently The bonds borrowed against the assets function

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as the collateral in the loan funding whatever a B

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s security is being offered You have an airplane or

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actually one hundred of them together they're worth two billion

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box bonds were issued to buy them two billion bucks

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worth of bonds BBB The planes are going to be

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incorporated into SHMOOP West Airlines flight schedule Only problem Shmoop

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West doesn't have the collateral or the cash Ola to

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just you know by them But shmoop West Air can

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lease them or pay interest on them for the privilege

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of using them And that's a good thing because well

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eBay airlines just happens to own a bunch of used

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airplanes So what happens then Well the owner of the

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airplanes pledges them as collateral and raises cash ola money

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in the form of bonds by borrowing against the assets

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of the airplane The asset of the airplane is the

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guarantee that backs the bond Should something up you know

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go awry So uh yeah On behalf of everyone here

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it's shmoop West Air We'd like to wish you a

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safe ish flight Peanuts

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