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Last Thursday, I mentioned that my son and I were talking about real estate assets.

My son, like most folks, has a bias towards ownership. This runs deep – the only relationship he sees with assets is own vs want.

Now, as any yachtsman will tell you, when it comes to assets… the person getting the greatest benefit isn’t always the person paying the bills.

Two questions that are fundamental to how you organize your affairs:

• Who gets the benefit of the asset(s)?
• Who gets the benefit of your time?

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From Thursday’s example…

• The direct benefit of the renal property goes to the tenant.
• The cash flow goes towards my cost of living.
• Not having to earn that cash flow, gives me time to spend educating my kids.

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The person, or entity, that owns the rental property doesn’t matter as much as you’d think.

What matters is who uses, who controls and who gets the benefit of… the asset.

The mismatch, between ownership and benefit, is a key source of friction within family systems. To mitigate, each generation should have an opportunity to create and affirm their own values.

Short version: we each agree to pay our own way.

The mismatch is also why our political class does a poor job of picking winners, setting preferences and allocating resources.

Incentives matter.

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So, are you a balance sheet builder? Are you someone who enjoys using assets? Do you seek power through the ability to control budgets? Does giving to others bring you happiness? Do you love the thrill of the deal, or is it more about the novelty of a new purchase?

As a young person, these questions can be difficult to answer. Even when you think you’ve answered them… you might think differently later.

Here’s something I’ve noticed about myself. The more I notice others, the more I need to step back, relax and recharge. When I’m getting enough time to recharge then the noise of the world flows by.

Remember time and you will make fewer mistakes.