In personal finance, assets refer to the resources or possessions owned by an individual that have financial value. These are what makes up the sum of what you own, can contribute to an individual's net worth and provide future financial benefits. Here are some of the most common types of assets in personal finance.
Types of Assets
- Cash and Bank Accounts: Money held in checking accounts, savings accounts, certificates of deposit (CDs), and other liquid forms.
- Investments: Ownership of stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other financial instruments with the potential for capital appreciation or income generation.
- Real Estate: Ownership of residential or commercial properties, including houses, apartments, land, or rental properties.
- Retirement Accounts: Contributions made to retirement savings accounts such as 401(k), Individual Retirement Accounts (IRAs), and pension plans.
- Vehicles: Ownership of cars, motorcycles, boats, or other vehicles that hold value and can be sold.
- Personal Property: Valuable possessions such as jewelry, artwork, collectibles, furniture, electronics, and other items of significant worth.
- Cash Value of Life Insurance: The accumulated cash value in a permanent life insurance policy that can be accessed or borrowed against.
- Business Ownership: Ownership or equity stake in a business or professional practice.
- Education and Skills: Personal skills, knowledge, and education that can contribute to future earnings potential.
- Other Assets: Miscellaneous assets such as valuable patents, copyrights, trademarks, royalties, or any other assets with financial value.
It's important to note that in personal finance, liabilities, such as debts and obligations, should also be considered alongside assets to determine an individual's overall financial position. By subtracting liabilities from assets, one can calculate their net worth, which is a measure of their financial health and wealth.
Assets and Net Worth are two of the most prominent figures you'll find on your Strabo dashboard, and contribute to your retirement forecast.