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What is the difference between assets and liabilities?

Curious about Know your money

What is the difference between assets and liabilities?

Assets are things that a person or a business owns and has value. Examples of assets include cash, investments, property, and equipment. In personal finance, assets can also include items such as cars, jewelry, and electronics.

Liabilities, on the other hand, are obligations that a person or business owes to others. Examples of liabilities include loans, credit card debt, and mortgages. Essentially, liabilities are debts that a person or business owes to others.

The difference between assets and liabilities is important because it gives an indication of a person's or business's net worth. Net worth is calculated by subtracting liabilities from assets. A positive net worth indicates that a person or business has more assets than liabilities, while a negative net worth indicates the opposite.

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