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Assets and Why We Want Them Assets vs. Income
As discussed in Chapter One, assets are the stock of wealth in a household, while income is the flow of resources through a household. Comparing your Income/Expenses worksheet to your Net Worth worksheet, which you completed in Chapter One, will give you a good idea of the difference between your assets, or wealth, and your income. Tangible Assets include: - Money savings (with interest earnings)
- Stocks/bonds (with dividend earnings)
- Real property (with capital gains earnings and/or rent earnings)
- Hard assets other than property (such as jewelry, art, etc.)
- Machines or other components of production
- Durable household goods (like washing machines)
- Natural resources (farmland, oil, minerals, timber)
- Copyrights and patents (intellectual property)
Assets provide a financial safety net
Income and assets are like springs and ponds for a farmer. If a farmer had to rely on a brook bordering his land to hydrate his crops, he would be fine in the beginning of the season, but would run out of water in the summer drought. So, the farmer channels his stream into a pond that he keeps as a reserve for use during the dry times. Similarly, assets can help us weather times of lower income, job loss and sickness, and otherwise act as a safety net for the household. Homeownership, education and owning your own business are all examples of assets that you may be saving to purchase. Each has advantages and disadvantages and it is important to be aware of these qualities before you make your purchase. Following are some possible advantages and disadvantages. Look at the lists and think about additions you would make, both in the advantages and disadvantages columns. Homeownership Advantages | Disadvantages | A place of your own | Upkeep and taxes are expensive | Being a part of the community | Possibility of foreclosure | Security | Decreased mobility | Space for a family | Repairs and maintenance are a lot of work | Possible income (rent) |
| Equity |
| Ability to decorate, make noise |
| Scheduled savings |
| Stable housing costs |
| Appreciation (increase in value) |
| Tax benefits |
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Education
According to a 2001 Census Bureau survey, adults with a college degree took home an average of $45,678 per year as compared to the $24,572 average salary of those who only completed high school. College also allows you to: - Explore new interests
- Find out what you want to do in life
- Learn specific skills that are career related
- Expand your employment opportunities
- Increase your understanding of the world and our society
- Broaden your experience in life
- Meet people from different backgrounds and cultures
- Become independent
- Develop leadership skills through activities
- Gain control over your future
Business Ownership Advantages | Disadvantages | Be your own boss | Can put your assets at risk | Hard work benefits you, not your boss | Sometimes provides less pay at first | Earning and growth potential less limited | Less reliable stream of income | Lots of variety and challenge | Often longer hours and more demanding |
| Requires the "right" personality |
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Affordable Housing 
Maine Legislature Passes Model Anti-Predatory Lending Bill.