Dad, what do we do with money?
Anything you can trade for money. Time is likely an asset most people could trade for money, depending on your level of skill, specializations, formal trades and qualifications would qualify the rate or amount you could earn but we will discuss more on that in markets and business.
Assets for most children would be a toy or maybe a bicycle the simplest way to think about an asset is if it is worth more or less than when you bought it. A well-maintained clean bicycle may preserve its value better than a motor vehicle if a moderate-quality one was purchased and used it would retain almost all of its value especially since children grow and tend not to ruin bicycles. A new one we should talk about markets and why new is a bad use of money. Physical assets are the easiest to understand like cars, tools, books or physical things around your house most of them will depreciate with time.
Cash is an asset but in the near term it is worth about the same week to week but less year to year depending on your markets and the overall cost of basic goods and services which could increase year on year. Consumer staples food, milk and petrol or gas tend to be tied to the cost of labour and transportation and are volatile and subject to inflation as they are consumed frequently and things like milk don’t last long.
Computers and cellular phones are deflationary, and we continue to get better and better products at more favourable or stable prices (the quality and the abilities of cellular phones to do all basic computing functions are expanding at a remarkable pace.
Software is wildly deflationary and expensive to develop. Still, almost free to deploy at scale so it is often tied up with marketing, advertising or service charges and it is wildly profitable because of how deflationary the technologies are.
So what assets might appreciate or increase in value? Gold, jewels or precious metals not usually unless they are rare or collectable gold tends to be very volatile and sometimes a better store of value if you have a bad FIAT currency. Houses or real estate appreciable assets tend to go up in price but houses are expensive. House values and taxes are interwoven and cripple economies and innovation in some parts.
Cryptocurrencies are speculative and novel and may have some store of value but are only 15 years old compared to gold which is around 4500-5000 years in use. Dollars or FIAT currency we will talk about but usually are only useful in short-term measures.
Shares in a company's stock are good long-term investments of 5-50 years they can be bought or sold in regulated publicly traded markets quickly and easily through a custodian or broker. That technology may change with the decentralized ledgers because currently it is all on centralized trading platforms or exchanges and banks are the most common custodians.
Those things that only cost money are truly cheap, but they are rare there are always tradeoffs that may turn an asset into a liability.