What is debt and assets? Easy to understand "flow of money" for beginners

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Assets and abilities are the fundamentals of understanding money.

In short, you can organize:

• Assets generate value
• Debt pays in the future

But beginners

All assets and debts are invalid

It is simple to think.

In fact, there are assets that generate revenue, and there are assets that require maintenance costs.

In addition,成長abilities for waste are dangerous, but there are also成長abilities that lead to growth.

This article explains the differences between assets and abilities, the idea of investment, and the points that beginners should be aware of.

What is an asset?

Assets generate future money and value.

If you think individually, there are:

In the company, it is assets such as factory, land, cash, inventory, patent, and brand.

What is debt?

Debt is a duty to repay and pay in the future.

Here are some common debts for individuals and companies:

Debt includes repayment and interest payments.

Therefore, it is important to see the repayment capacity when having abilities.

Relationship between assets and abilities

Accounting is expressed in the following relationships:

Assets = Debt + Net assets

This is the basis of corporate accounting.

It is possible to think the same as the personal household.

Net assets are the資産abilities and the differences in the future.

What is Net Asset?

Net assets are the value of the property that remains after the debt is drawn.

For example:

In this case, net assets are:

¥10,000,000 - ¥6,000,000 = ¥4,000,000

In other words, net assets are 4 million yen.

In asset formation, it is important to eventually increase this net asset.

Good assets and assets that need attention

There are various types of assets.

There are things that generate value and revenue just by having them, and some of them have more maintenance costs.

Examples of good assets

Attention required assets

There are some things that can actually make money even if it seems to be "an asset from having".

When you look at assets, consider revenue, maintenance costs and future value.

Good debt and bad debt

Debt is the same.

No abilities are bad.

Example of Good Debt

• Education
• Business
• Un onable m gage
• Loans to increase future income

Debt that leads to future value and income will become a tool of growth depending on how it is used.

Example of Bad Debt

• Revo payment
• Loans for waste
• High interest rate loan
• No repayment plan

In particular,資産abilities of high interest rates are prone to the formation of assets.

It may be rational to reduce high interest-bearing debt before investing.

Assets are important in investment

In asset formation,

Not only work but also work on assets

It is important to think.

Here are some examples:

• idend of shares
• Bond interest
• Real Estate Rent
• Increased investment trust

However, the asset price will always change.

Even assets that generate revenue may fall short-term.

Important in corporate analysis

Stock investments confirm corporate assets, abilities and net assets.

Here are some points you want to pay attention to:

• Is there too much debt?
• Is there a lack of cash?
• Is there a red letter followed?
• Is there too much debt to profit
• Is sales cash flow stable?

Pay attention if the debt is too heavy, even if the company has increased sales.

Beginner-friendly misunderstandings

All debts

There are some dangerous debts, but there are loans for growth investment.

Important is the purpose and repayment capacity of the debt.

All assets are valued

Some assets may have lower value or maintenance costs.

After buying, you need to think carefully.

Only cash

Cash is a safe asset in the short term.

However, when inflation progresses, the substantial value of cash may be lowered.

Therefore, it is important to consider cash, stock, and investment trust in the long term.

Long-term importance is increasing net assets

It’s not just about increasing revenue.

Important is to increase net assets.

In order to do so, the following three are important:

• Increase assets
• Manage debt
• Cash Flows

Finally,

Boost future freedom

It is the essence of asset formation.

Assets generate value and revenue

• Debt must be repayment
• The difference between assets and abilities is net assets
• Good assets and assets that require attention
• Distinguish Good Debt and Bad Debt

Let’s start with the following three things:

1. Make a list of your assets
2. Reduced interest-bearing debt
3. Long-term asset formation

Understanding assets and abilities makes it easier to see the flow of money.

It is important to have a viewpoint of increasing net assets, even for investment and household management.

Concept

A structure that intuitively understands the difference between assets and abilities.

Text

• Main: Assets and Debt
• Sub: Explanation of the basics of money

Color

• Blue
• Red White

Comparing assets and abilities

構成

• Left: Asset
• Central: Libra
• Right: Debt