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Definition of 'Asset'

An asset is a resource with economic value that can be converted into cash or used to produce more assets. Assets can be either tangible, such as a car or a house, or intangible, such as a patent or a copyright.

Tangible assets are physical objects that can be seen and touched. They include cash, investments, property, and equipment. Intangible assets are non-physical assets that have value but cannot be seen or touched. They include patents, copyrights, goodwill, and trademarks.

Assets are important because they can be used to generate income or to create more assets. For example, a car can be used to get to work, which generates income. A house can be rented out, which also generates income. A patent can be used to create a new product, which can be sold for a profit.

Assets are also important because they can be used to reduce risk. For example, if you have a savings account, you can use the money in the account to cover unexpected expenses. If you have a life insurance policy, you can use the money from the policy to support your family if you die.

It is important to manage your assets wisely. You should make sure that you have enough assets to cover your expenses and to meet your financial goals. You should also make sure that your assets are diversified, so that you are not exposed to too much risk.

There are many different ways to manage your assets. You can invest in stocks, bonds, mutual funds, and other financial instruments. You can also use your assets to start a business or to purchase real estate.

The best way to manage your assets depends on your individual circumstances. You should work with a financial advisor to develop a plan that is right for you.

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