Asset
Something you own that has monetary value, such as cash, investments, property or a vehicle.
What it means
In personal finance, an asset is anything you own that could be turned into money. Assets are often grouped by how easily they convert to cash: liquid assets like checking and savings balances, investment assets like stocks, bonds and retirement accounts, and physical assets like a home, car or jewelry.
Some assets tend to grow in value over time, such as diversified investments, while others, like most cars and electronics, lose value steadily. An asset’s value for net worth purposes is what it could realistically sell for today, not what you paid.
Example
For example, a household might list $5,000 in checking, $25,000 in a 401(k), and a car that could sell for $12,000. Those assets total $42,000.
How it’s used
- Calculating net worth
- Applying for a mortgage, where lenders review your assets and reserves
- Planning which resources could cover an emergency or retirement
Related terms
Educational information only, not financial, tax or legal advice. Rules, limits and rates change; check the IRS, your lender or plan, or a qualified professional before acting.