Defining an Asset
What is an asset?
It is what you own that you could sell.
From the dictionary, asset = "item of ownership convertible into cash". Cash, or any exchange value.
So is your furniture an asset? Yes, technically, because you could sell it for something. But how much, really? Not enough to spend all your money on furniture and believe that you are wealthy.
Is your car an asset? Yes, though like furniture, it's a dwindling asset. You could sell it for cash, minus any smaller amount you owe on the car, therefore it is an asset. But a car is worth less every year.
Dwindling assets lose market value, or depreciate, with time. While dwindling assets are indeed assets, they are not as good a measure of wealth as Growth assets.
A house is worth more in twenty years than it is today. Stocks, securities, investment partnerships, mutual funds, real estate all grow in value. You can convert these items into cash, or you can sit back as they exponentially increase.
The rich-looking person who prescribes to the He Who Dies With The Most Toys Wins outlook on life likely has plenty of dwindling assets. But the truly wealthy person looking to the future seeks growth assets that give back more than they c10/11/2006">