Assets vs. Liabilities
An asset is anything you own that has value — cash, investments, a home, a car. A liability is anything you owe — a mortgage, student loans, a credit-card balance. Subtract liabilities from assets and you get your net worth, the bottom line of your finances.
Not all assets are equal: investments and a paid-down home build wealth, while a car loses value over time. The wealth-building move is steadily converting income into appreciating assets while keeping liabilities — especially high-interest ones — small.