Assets Or Liabilities? What Will You Choose?
The topic I am going to discuss might be boring for the majority of people but it's one of the most important topics. To maintain your life you must know the balance between the assets and liabilities. I won't write this post long because I want you to read the fact.
An individual's assets are everything they own and can use to pay their debts. These include bank accounts, stocks, bonds, real estate, and personal property. The total value of an individual's assets is called their net worth.
An individual's liabilities are everything they owe. These include mortgages, car loans, and credit card debts. The total value of an individual's liabilities is called their debt.
An individual's income is the amount of wealth they acquire during a specific period of time, which includes wages, salaries, and tips. An individual's expenses are the amount that they spend during that same time period. These include rent or mortgage payments, utilities, food costs, and other expenses.
After acquiring their assets, liabilities, income, and expenses, individuals can then determine their net worth by subtracting their total debts from the total value of their assets.
At an early age, most people run towards liability but liabilities are not that preferable by most successful people in the start. First, you have to work on your assets than liabilities in my opinion. An individual's assets are better than liabilities since having more assets means they have more money to spend. However, an individual should have a good amount of both in order to remain financially stable. Too many liabilities without any assets can put an individual at risk for bankruptcy if they encounter difficult financial times. Conversely, too many assets without any liabilities can leave an individual unprepared for unexpected costs. A well-balanced mix of both is the ideal scenario.
I appreciate you, taking your time out in reading the article.
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I have a lot of friends who are in complete favour of getting a car through bank loans, but I have always been against it and will oppose it in the future as well. I don't think anyone of us in here would like to be associated to any form of liabilities. I don't understand how having liabilities would be beneficial for anyone. You mentioned
Why?
I think the most peaceful feeling that could be is to be free of any sort of liabilities.
Car is always consider as a liability because of it's other expenses but It actually depends because if you're buying a car for a bussiness for instance "rent a car bussiness" now this liability has become your asset for the bussiness and maintaining a balance is important between both means, what would happen if your car got an accident by the one who took it from you or you are facing some severe loss in your bussiness? All liabilities are not debt but I was talking about the unexpected cost which is a dept aka liability. The owner and the bussiness both are separate unit here, the assets the owner is putting in the bussiness has become a liability for the bussiness. How can a bussiness run without a liability then?? That's why there must be a balance, the unexpected lost in bussiness would disturb the balance but I was talking for the bussiness and stock point of view.
Unfortunately, we can't free ourselves completely from the liabilities.
Thank you for taking out your time to explain it to me. Completely agree 💯