Category: Money | Finance
Definition of Asset
Assets are your economic resources, assets are what puts money in your pocket, they are either tangible or intangible, but they are owned or controlled by you, so that you are able to turn them into cash when you need them.
Some assets may not be as liquid as others, such as a bank savings account compared to real estate. The savings account you may walk up to any ATM machine and withdraw some of your cash asset. Whereas with real estate it may take some time to acquire a loan against the asset, or to sell the asset to obtain cash, but it is still an asset as it has positive economic value to you.
Assets may be of many forms, but they are either tangible or they are intangible.
Examples of tangible assets, assets that you can readily turn in to cash are:
- Checking Account(s)
- Savings Account(s)
- Short-term investments
- Prepaid expenses
- Automobile (depreciating asset)
Examples of intangible assets, assets that are of economic value, but not readily turned into cash:
- Real Estate
- Accounts Receivable
- 401K | Keough | IRA
- Company Retirement Plan
These are just some of the examples in each category, but it gives you an idea of what you will include on the Asset portion of your spreadsheet.
Though assets are cash and items you can turn in to cash, to truly be an asset it must be increasing in value or generating additional revenue, thus increasing the amount of assets you own and control.