#assets

2 public notes

Net worth is what remains after subtracting what is owed

Net worth is the value of assets minus outstanding liabilities at a particular point in time. Someone with ₹8 lakh in assets and ₹3 lakh in debt has a net worth of ₹5 lakh. A high income alone does not reveal this figure because income is a flow, while net worth is a snapshot.

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liquidity

Liquidity is about turning value into usable cash

Liquidity describes how easily an asset can become cash without a substantial loss in price. A property may be valuable yet take months to sell. Money already available in a transaction account can be much easier to use for a bill due tomorrow, despite being a smaller asset.

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