May 8, 2019
Assets are more than just the money in your bank account. Assets can have a gargantuan impact on your financial future. A thorough understanding of assets can help with your net worth. It can also help you to make much better financial decisions.
An Asset is Anything of Value
Simply put, if it has value and you own it, it is considered an asset. Debitoor describes, the value of assets can be determined by researching the worth of your tangible assets, which are the ones that can be physically seen and touched, and the worth of your intangible ones. Pure liquid assets are cash or something that can become cash within moments. Liquid assets include items such as stocks and bonds. Ones that cannot be made liquid are things like patents; these hold value but aren’t able to be turned into cash.
Assets Create Value
Assets don’t just hold value, but they can also create it. Market Realist explains that when you have substantial assets, your overall net worth increases. This can raise your credit standing and afford you more opportunities. Not all value can be gauged from your bank account. A variety of assets could make a huge difference in the quality of your life. It could start with a robust bank account and progress to things like luxury cars and a three-story house.
When Are Assets at Risk?
If you find yourself in a precarious financial situation, your assets could be in serious jeopardy. Legally Mine cautions that some of the biggest threats to assets are lawsuits, tax liens, bankruptcy and divorce. Should you find yourself unable to pay your debts, you might find that it’s your assets that the court or other authority goes after.
However, you might be able to use asset protection to your advantage. This is a measure that limits the power of entities to seize assets. Should you ever want to use asset protection, you should consult with your financial planner in advance. That way, you can immediately take action in the event of a potential financial catastrophe. No matter what you do, never try to conceal assets. Doing so will only lead to further problems.
It’s not the number of assets that you have as much as it is their value and what you do with them that matters. Work with a financial advisor to make the best possible use of your assets. Should you need to take part in any kind of asset protection plan, it helps to be prepared for that possibility in advance.
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Eileen O'Shanassy is a freelance writer and blogger based out of Flagstaff, AZ. She writes on a variety of topics and loves to research and write. She enjoys baking, biking, and kayaking. Check out her Twitter @eileenoshanassy.