Your assets are not limited to the total amount of money you have on hand; rather, they include all the valuable goods that you own. Their value is based on the assumption that you could sell these goods in an orderly fashion and get their market value. Assets come in many forms, including monetary assets, investment assets, and retirement assets; assets also include real estate, vehicles, personal property, and so on.

Assets can be subdivided into four categories. Income-generating assets are the best type of assets. These assets generate income or capital gains which may eventually allow you to have income without your having to work. These would include financial assets such as stocks, bonds, or mutual funds; rental properties that are structured well; or even some types of insurance.

Appreciating assets are assets which may or which have historically appreciated in value. Examples include your home or certain types of business assets.

Depreciating assets are assets which depreciate in value. Often, the minute you take ownership of these assets, i.e. drive these assets off the car lot, they drop in value. This includes assets such as automobiles, recreational vehicles, boats, etc.

Finally, income-consuming assets are assets (perhaps also listed above) which require a constant infusion of cash to keep operative. Examples include automobiles (which require maintenance, fuel, and insurance), recreational vehicles (maintenance, fuel, and insurance), homes (property taxes, repair, upkeep, and insurance), recreational properties (property taxes, repair, upkeep, and insurance), etc.

Different types of assets fulfill different needs of an individual or family; these needs include such things as liquidity, protection, and capital appreciation.