Assets / Liabilities / Net Worth

Assets are resources owned by an individual or entity that have economic value and can provide future benefits. Examples include cash, real estate, and vehicles.

Liabilities are obligations or debts that an individual or entity owes to others. They represent claims against the assets. Examples include loans, mortgages, and credit card balances.

Net worth is the difference between an individual's total assets and total liabilities. It represents the financial position of an individual or entity.

Yes, net worth can be negative if liabilities exceed assets.

A Car is an example of an asset.

Stock is not a liability.

House Mortgage is not an asset.

Net worth is calculated by subtracting total liabilities from total assets: Net Worth = Total Assets - Total Liabilities.

Assets contribute positively to financial health as they can be converted into cash or provide future income.

Liabilities can negatively impact financial health as they represent debts that must be repaid.