10 Basic Terms That You Should Know About Personal Finance

Understanding basic money terms should be your first step towards financial literacy. It would be very difficult to start learning financial literacy, much more overhaul your financial life without understanding the basics. Just like reading for example, you won’t be able to learn how to read without knowing the alphabet.

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Asset

According to Robert Kiyosaki, “an ASSET is anything that puts money in your pocket.”

He also says that your house is not an asset and is in fact a liability. Is that surprising? There are other things we think are assets but are actually liabilities. Based on this definition, check your list of assets and see if they really are assets or not.

Ideally, your assets should exceed your liabilities to enable you to build your wealth and enjoy financial freedom.