What is Asset?
An Asset can be anything of value or a resource of value which can converted into cash.
In simpler words, anything which can generate income is an asset
Basically assets are classified into 3 categories from very long time.
- Fixed Income
- Cash Equivalent
In common language, it is known as shares or stocks. We can get shares of the publicly listed companies from the different brokers available online. Will write an article on How to open an account with brokers and start investing in equities.
Equity is a long term instrument to generate wealth.
It’s commonly known jargon. Very known income sources fall under Fixed Income. Some of them are fixed deposits, Land, Government bonds.
Cash Equivalent are the type of assets which can be converted into cash immediately like bank accounts, GOLD, short term debt funds which are time period of less than 90 days. Cash Equivalent has high liquidity ratio
Even equity can be converted into cash immediately but don’t fall under cash Equivalent as it’s come with high risk and fluctuations.
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