Individual Assets
Any property or an item held by an individual that has an economic value is called as his personal assets. For example consider a car, a house or even a valuable watch, all these can be considered as a person’s individual asset as it has an economic value. The value of personal asset is a very important for an individual when he needs to borrow a loan from the bank or for any other form of financial assistance.
Two ways to determine the individual assets:
For determining the personal assets of a person there are two ways to be followed:
- Look at the amount that an item or a property would fetch if sold in the market today.
- Second is the appraisal value or the cost based on the items potential future prize.
When taking insurance on personal assets like properties the difference between these two market values is very important. This is because the insurer asks for the appraisal value of the property rather than the current market rate.
Some individual assets like real estate can be leased or rented, through which a taxable income can be generated. But you are liable to pay your taxes failing which you may have to lose your mortgage. Any asset that has a known monetary value is termed as liquid asset and those that require the analysis of market rate or selling price is called as non-liquid assets.
