Net worth starts with two columns: what you own and what you owe.
Direct answer
An asset is something you own that has value or can generate income. A liability is money you owe. Subtract liabilities from assets to find your net worth. Building wealth usually means growing assets and reducing liabilities over time.
Examples
| Assets | Liabilities |
|---|---|
| Savings and cash | Credit card balances |
| Investments | Student loans |
| Property you own | Mortgage |
| Business value | Car loans |
| Pension | Unpaid bills |
A caution on cars and homes
Whether something is an asset in practice depends on its value and costs. A car may lose value and cost money to run, even though it is something you own.
How to use it
- List your assets with current values.
- List your liabilities with balances.
- Subtract to find net worth.
- Track it every few months.
Where Teyro fits
Teyro's Money Habits That Build Long-Term Wealth course turns this into short lessons you can play in a few minutes a day. It has 50 lessons, and you can start free.
The bottom line
Know both columns and aim for the gap to widen.
This is general education, not personal financial advice.
