Understanding Assets and Liabilities

[nomad]

Assets and liabilities differ hugely. If you want to become financially successful, you need to understand the difference between what is your assets and what your liabilities are. You own a house, you spend money to pay for mortgage, you pay for maintenance and insurance, it does not generate you any income, it is your liability and not the asset. However, if you have rented out your house and you generate rent, it will bring you money, thus, it is an asset.

 

[ekta]

Assets are resources owned by an individual or business, contributing to economic value, including, cash, property, and investments. Liabilities are obligations or debts owed, such as loans or mortgages. a crucial aspect of financial management is maintaining a healthy balance between assets and liabilities. A positive net worth arises when assets exceed liabilities, signifying financial strength. Regularly assessing and managing these components is essential for financial stability and planning.

 

[Stardom22]

For one to become successful financially, then they must have more assets than liabilities. This is because with the liabilities people tend to spend money on while with the assets you get earnings on them.

 

[cherry123]

Yes assets are what you owned while liabilities are your Owings.thsts why it is always good to have more assets than liabilities

 

[Passiveearner]

Whenever your expenses increase, your liabilities also tend to increase as well. A cycle of this problem may lead to more debts. Your assets can only increase when your income increases. When your income increases, you may buy more assets.

For one to become successful financially, then they must have more assets than liabilities. This is because with the liabilities people tend to spend money on while with the assets you get earnings on them.