An asset is a resource with economic value. It can be owned by a person, a company, or a government. A house, a car, a bank balance, a patent, and a factory are all assets. So is a brand name. The common thread is that the asset can be converted into cash, used to generate income, or both.

Assets fall into categories. Current assets convert to cash within a year: cash, inventory, accounts receivable. Fixed assets last longer: buildings, machinery, land. Financial assets are claims on other entities: stocks, bonds, deposits. Intangible assets lack physical form but hold value: trademarks, copyrights, goodwill. Each type appears differently on a balance sheet.

Assets matter for borrowing. Lenders look at what you own before deciding how much to lend. A mortgage is secured by the house itself. A business loan may be backed by equipment or receivables. Assets also shape net worth. Subtract liabilities from assets, and you get equity. That number tells you what is truly yours. Building assets over time is the slow work of financial security.

Common types

• Cash and equivalents
• Real estate
• Stocks and bonds
• Equipment and inventory
• Intellectual property