Assets Vs. Liabilities: What’s the Difference

[Zelda]

Assets are resources owned that generate value, like cash, stocks, or real estate. For example, owning a rental property generates income. Liabilities are obligations or debts, such as mortgages, loans, or credit card debt. For instance, the mortgage on a rental property is a liability. Assets increase your net worth, while liabilities decrease it, making understanding and managing both crucial for financial health.