Assets are good – they are always good. I cannot objectively think of any situation where assets are anything BUT good. An Asset is basically anything that generates wealth for your business (or yourself) that you own. Note that the key word here is “wealth”, not “money”, but “wealth”. This is because money, as in
Liabilities. Liabilities are bad. Well, not bad like cocaine bad (don’t do drugs kids!), but more bad in the sense that having 10 Jelly donuts in one sitting is bad for you (I’ve never tried it before myself, but I can imagine it’d be pretty bad). A liability is basically anything that you owe to
Equity is mostly good, but not like Asset-level good, but good like the weather is nice and sunny and you’re going out for a jog and then the weather decides to start raining. Hard. Equity is essentially money brought into the business by the business owners. So, if you, as an individual, own a business
Wait, before you read on any further, have you read about Assets, Liabilities and Equity? If you haven’t, this post won’t make much sense – so go and read them first then come back! When you put the good, the bad and the ugly together, you get something beautiful which is known as a “balance