What are Assets? 

What are Assets? 

What are Liabilities?

What are Liabilities?

How I Define Assets And Liabilities

Simply, an asset is something you own, while a liability is something you owe.

Here are some examples of assets:

– Primary residence

– Rental real estate

– Mutual funds

– Stocks

 – Mortgages

Here are some examples of liabilities:

– Credit card balances

– Auto loans

– Student loans

– Library books

Stocks: these go down in price almost as often as they go up

Deconstructing The Argument

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Bonds: these go down when interest rates go up

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Crypto currencies: these frequently go down in price

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Businesses: same as with stocks, the value of a business can go up or down

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Cars: Ms. Riordan says about this: “Cars? (This one to me is absurd because it depreciates in value for the entirety of its life.)”

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It’s almost guaranteed to be a depreciating one, and thus not a good financial investment (excluding certain cars that become collector items), but an asset it is.

Is Your Car Or House An Asset?

Your home too, is an asset, even if there’s a mortgage on it.

Wait a Minute! Who Can Afford to Buy a House All-Cash?! How About the Mortgage Interest Almost All of Us Have to Pay?

So, Your House IS An Asset, But Is It A Good Financial Investment?

The Bottom Line

The Bottom Line

If I own it, whether it makes or loses money, it’s an asset

If I owe it, it’s a liability

An asset isn’t necessarily always a great investment, but even if it loses money that doesn’t make it a liability

Owning a home is in most cases (assuming you can afford it) a far better financial deal than renting a similar property

Money Management

For More Posts about

How Refis and High Inflation Turned 3 Mortgages into Assets that Actually Make Money

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