Anything you own that has positive economic value and can be converted to cash. Examples: Cash, Stocks, Real Estate, Business Inventory.

Financial debts or obligations you owe to other parties. Examples: Credit Card Debt, Mortgages, Student Loans, Car Loans.

The ultimate measure of your financial health. Calculated simply as: Total Assets minus Total Liabilities.

A cash reserve specifically set aside for unplanned expenses or financial emergencies (like medical bills or job loss). Aim for 3-6 months of living expenses.

The general increase in prices over time, which decreases the purchasing power of your money. If inflation is 5%, your money is worth 5% less than it was last year.

A percentage measuring the profitability of an investment. (Net Profit / Cost of Investment) x 100. It helps you evaluate which investments are actually growing your wealth.