1.) Owning assets means you are closer to being financially independent.
If an individual has no assets but does have debt like mortgage or credit card debt, they can be categorized as part of the ‘working poor'.
Someone who had purchased all their assets with cash, then even if something happens to one of those assets, they can just go out and buy another one.
2.) Purchasing an asset for cash reduces risk of loss.
Let us say Joseph has no assets but does have debt, he cannot afford the new sports car but he really wants it. He borrows money from loan sharks at high interest rates resulting in him eventually losing his home.
3.) It forces the individual into being more frugal.
When individuals purchase big ticket items ‘on hire-purchase' they are often shelling out more money than they need to over the long term as well as being charged large fees for doing so.
4.) Cash purchases typically provide better value for money.
5.) It can provide financial freedom later in life.
Someone who has no assets and must rely on their state pension which could easily be discontinued. The ending result could see the individual forced onto the street.