What are assets?

The U.S. Securities and Exchange Commission says that assets are “any tangible or intangible item that has value in an exchange.” Simply put, assets are things people or businesses own that have monetary value. 

Learn more about what assets are, why they matter and how to calculate your net worth.

What you’ll learn:

• Assets are things you own that have value. 

• Property, cash, investments, jewelry, art and collectibles are examples of assets. 

• Liabilities can be thought of as the opposite of assets and generally include things like student loans, auto loans, mortgages and credit card debt. 

• You can calculate your net worth by subtracting the total value of your liabilities from the total value of your assets.

Assets can be broken down into two categories: personal assets and business assets. 

Personal assets belong to an individual or household. They might include: 

• Property like a home, land, boat or car

• Jewelry, art, antiques and collectibles

• Cash, including physical money and funds in a checking or savings account

• Investments like certificates of deposit (CDs), stocks, bonds, mutual funds, retirement accounts and pensions

Business assets are owned by companies. The U.S. Small Business Administration says there are three types of business assets: 

• Tangible assets include items like vehicles, equipment, office buildings or warehouses typically used in regular operations.

• Intangible assets are things you can’t see or touch, like brand recognition or company reputation.

• Intellectual property is a type of intangible asset that’s often protected by a trademark or copyright. It includes patents, software and domain names.

You can think of liabilities as the opposite of assets. They’re debts that must be repaid.

Personal liabilities might include: 

• Personal loans
• Student loans
• Auto loans
• Mortgages
• Credit card debt

Business liabilities might include loans, unpaid employee wages and utility bills.

Lenders might take into account an applicant’s assets during the approval process for a loan, like a mortgage or car loan. Some lenders might even allow some assets to be used as collateral for loans.

The value of your assets also affects your net worth, which is a measure of your financial health.

For example, if your total assets are worth more than your liabilities, you have a positive net worth. If you owe more than you own, you have a negative net worth and your finances may need some work.

You can calculate your net worth using this simple formula:

1. Add up the value of all your assets. 

2. Add up the value of all your liabilities. 

3. Subtract your total liabilities from your total assets. 

Your net worth can change alongside the values of your assets and liabilities. For example, the market value of your house might increase or decrease. Or you might take on or pay off debt over time.cccccddevtifjciickjueibcvcnehbunilichtgdfebe

Still have questions about how assets work? Here are the answers to some frequently asked questions about assets.

Understanding what assets are and why they matter can help you calculate your net worth and get a picture of your financial health.

If you’re building your net worth and looking for a credit card to support your financial goals, consider checking if you’ll be approved with 100% certainty for a Capital One credit card.