Types of assets and examples
When it comes to assets, the most common types are tangible and intangible, and liquid and illiquid (aka, fixed) assets.
Tangible vs. intangible assets
Simply put, tangible assets can be physically touched.
Tangible asset examples:
- Cash
- Jewelry
- Real estate
- Vehicles and machinery
- Furniture
Intangible assets, on the other hand, refer to things that are not physical.
Intangible asset examples:
- Intellectual property
- Patents and copyrights
- Licenses
- Royalties
- Research
- Social media accounts
- Computer software and apps
Intangible assets typically are more applicable to businesses, but they can also be owned by individuals. By knowing and identifying what your intangible assets are, you can better estimate your future value or worth.
Liquid assets vs. illiquid (fixed) assets
Liquid assets are any that can easily be converted into cash in a short amount of time. These assets are sometimes simply referred to as cash, or cash equivalents.
Liquid asset examples:
- Cash and bank accounts (checking and savings)
- Money market funds
- Mutual funds
- Stocks and bonds
- Treasury bills and notes
- Certificates of deposit (CD)
Illiquid or fixed assets, meanwhile, are those that can’t be quickly converted into cash. They may be used to generate future income.
Illiquid (fixed) asset examples:
- Real estate and land
- Retirement accounts
- Tools
- Vehicles
- Furniture
- Jewelry
- Art collection
Assets vs. liabilities
Liabilities are any debts you owe. These can be to individuals, businesses, or even organizations, like the government (think taxes). Other examples of personal liabilities could include credit card balances, loans, and mortgages.
When it comes to gains and losses, it may be a good idea to keep track of your assets and liabilities on a personal balance sheet. A personal balance sheet provides a snapshot of how you’re doing financially.
Understanding the relationship between assets and liabilities is a vital part of building wealth and having financial security.
Assets: The bottom line
Assets refer to anything owned by an individual or organization that has monetary value. They can be broken up into a number of asset types, all of which contribute to an organization’s or individual’s overall value.
