 |
| Image Source: http://flickr.com/photos/77836908@N05/ |
Asset is anything that puts money into your pocket.Here are some examples of an asset:
Business
Real Estate Property
Paper Asset (Stocks/Bonds/Mutual funds)
Job
Real Estate Property
Paper Asset (Stocks/Bonds/Mutual funds)
Job
Liability is anything that takes money from your pocket.Here are some examples of an liability:
Loan
Mortgage
Luxuries
Expensive Vacations
Mortgage
Luxuries
Expensive Vacations
When I say "ANYTHING" it really means anything.
Take note that an asset to me can be a liability to you (vice versa) an asset to you may be an liability to me.
An Asset is an asset as long as it produces money or simply puts money into your pocket. If it doesn't, then it's a liability.
Let's use a car as an example:
Let's say (Person A) bought a car for his private transportation.Because of the car here comes expenses (annual registration fee,license,gasoline,insurance,maintenance, etc..)-since these expenses takes money from person A's pocket--his car is a liability.
(Person B) also bought a car and turn it into a taxi.The taxi earns enough that it covers the car's expenses and also provides income.--This is an asset.
So is a car an asset or a liability? The answer is it depends on how you will use it. Same goes with a boat,house,cellphone,computer,etc.
Take note that an asset to me can be a liability to you (vice versa) an asset to you may be an liability to me.
An Asset is an asset as long as it produces money or simply puts money into your pocket. If it doesn't, then it's a liability.
Let's use a car as an example:
Let's say (Person A) bought a car for his private transportation.Because of the car here comes expenses (annual registration fee,license,gasoline,insurance,maintenance, etc..)-since these expenses takes money from person A's pocket--his car is a liability.
(Person B) also bought a car and turn it into a taxi.The taxi earns enough that it covers the car's expenses and also provides income.--This is an asset.
So is a car an asset or a liability? The answer is it depends on how you will use it. Same goes with a boat,house,cellphone,computer,etc.
