Assets Versus Liabilities: Knowing The Difference For Financial Success

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Understanding assets and liabilities is pertinent to achieving financial success.

Assets Versus Liabilities

Assets

There are two different types of financial assets: current and fixed.

Assets

Current assets are short-term assets the investor typically plans to use within one year—for example, cash and bonds with a maturity date less than one year away.

Assets

On the other hand, fixed or long-term assets are used over a more extended period—for example, software, furniture, and vehicles.

Liabilities

Examples of short-term liabilities include any money owed, like money owed on credit cards and unpaid invoices. A long-term liability can be a mortgage or long-term debt like student loans.

You’re Now Ready To Reach Financial Success

- Evaluate your purchases - Set financial goals - Consult professionals

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