What Is an Asset? How It Impacts Your Wealth

Reviewed by: Mark Zagurski CLU®, ChFC®, CMFC® and CRPC®

Estimated Read Time: ~6 minutes

Summary: Understanding your assets is vital for making smarter financial decisions. Discover how understanding assets helps you evaluate what you own, its accessibility and growth potential.

In this article:

• Why understanding your assets matters
• What is an asset?
• How your assets fit into financial planning
• How your assets and liabilities work together
• Seeing the bigger picture
• Frequently asked questions

An asset is anything you own with monetary value, like your house, car, banking or investment accounts. Assets can be tangible, like real estate and vehicles, or intangible, like stocks and bonds.

Why does this matter? Understanding your assets is the starting point for setting any monetary goal. Mark Zagurski, host of the Make it Personal Podcast, adds, “When you understand what you own and how it fits together, money stops feeling overwhelming and starts feeling manageable.”

Once you know what you’ve got, you can start thinking about what to do with it and how to grow it over time. You can’t plan where you’re going if you don’t know where you stand.

Why understanding your assets matters

Assets reflect your financial health by showing what you own and potential risks and opportunities. They also affect your net worth, calculated as:

Assets – Liabilities = Net Worth¹

A clear picture of your assets allows you to make better decisions about saving, investing and spending. For example, someone with a strong stock portfolio might have long-term growth potential but limited cash available for emergencies. Having wealth in real estate or retirement accounts may show financial strength but could also limit quick cash access without an emergency fund.

Additionally, it’s important to understand how your assets contribute to your overall financial picture. Integrating asset management into your financial plan supports your:

• Retirement strategies: You’ll know whether your investments and accounts are on track for long-term retirement savings and whether they can support the retirement you’re envisioning.
• Debt management: When you see what you own, it’s easier to decide which debts to prioritize and whether using assets to pay them off makes sense, particularly when handling debt in retirement.
• Estate planning: Your assets are what you’ll eventually pass down, so knowing what you have helps with estate planning and deciding who gets what and how to structure it.

What is an asset?

Very simply put, an asset is something you own that holds value. Different types of assets work in different ways:

Tangible/intangible

Tangible assets are physical items with specific monetary value that you can see and touch, including vehicles, real estate, equipment and collectibles.² They’re usually easier to value; however, some assets can be harder to sell quickly and may be subject to market fluctuations or depreciation.

Intangible assets are nonphysical but may still hold significant value. They include intellectual property, web domains, patents and more.³ These assets can change in value more quickly, but they can still generate income, grow over time or give you other financial benefits.

Additionally, a financial asset is an intangible asset that can generate income or be converted to cash, a crucial component in financial planning.

Common financial assets include:

• Stocks and bonds
• Mutual funds and ETFs
• Bank accounts and CDs
• Retirement accounts like IRAs or 401(k)s

Liquid/illiquid

Liquid assets are those that can be quickly converted into cash without losing much value.⁴ They include checking accounts, savings accounts, money market funds, and more. Having liquid assets makes it easier to cover emergencies and unexpected expenses.

Illiquid assets are harder to convert into cash.⁵ These include real estate, vehicles, art and collectibles and retirement accounts that have penalties for early withdrawal. These assets can increase in value over time and boost your net worth. However, they aren’t as helpful when you need money right away.

How your assets fit into financial planning

What you choose to do with your assets, and when, depends on your individual goals. For example, liquid assets are useful for handling a financial emergency without taking on debt. Financial assets, such as stocks or mutual funds, can help grow wealth over the long term, while illiquid assets, such as real estate investments, can provide stability and long-term value, but aren’t particularly helpful if you need fast cash. Although, financial assets can be and are often held up as collateral to help generate cash in a pinch.

Assets can also shape the way you handle debt. For example, if you have substantial assets, you might feel confident investing even with some low-interest debt. However, with fewer assets, you may prefer to focus on paying off debt before increasing your investments.

How your assets and liabilities work together

On their own, assets don’t show the complete picture. Your liabilities, what you owe, are just as important for understanding your overall financial health. Your net worth is a snapshot of assets minus liabilities.

Seeing the bigger picture

Assets provide context, clarity and flexibility in financial planning. They allow you to plan for emergencies, build retirement income, grow wealth and help manage risk.

Understanding your assets helps provide a solid foundation for making informed choices and a framework for evaluating options as your life and goals evolve.

At Mutual of Omaha, we provide financial planning resources to help you gain a clearer understanding of your finances, allowing you to plan with confidence for both the short and long term. Download our complimentary e-book, Seven Principles for your Financial Success to help you build lasting wealth, whether you’re just starting or fine-tuning your plan.

Ready for tailored guidance that’s unique to your goals?

Speak with us today

Frequently asked questions

Is a 401k an asset?

Yes, a 401(k) is considered an asset because it represents a financial resource that you own, which can grow over time and provide income for your retirement. It’s part of your overall wealth portfolio, contributing to your net worth and offering potential tax advantages.

What happens to my assets in a divorce?

What happens to retirement assets in a divorce depends on your state’s laws and whether they are classified as separate or marital property. Typically, assets gained during the marriage, including retirement accounts like 401(k)s and IRAs, are marital property and are divided between partners. However, assets owned before marriage are usually considered separate property, remaining with the original owner. Consulting a legal professional can provide guidance tailored to your circumstances.

Can assets lose value over time?

Yes, some assets can go down in value depending on the market, wear and tear or other factors. Stocks, real estate and collectibles may experience value changes. It’s crucial to understand these risks and plan accordingly. Even cash and bank accounts can lose value over time because of inflation, which is why working with a financial professional to diversify your asset portfolio is important to help mitigate potential losses.

Reviewed by: Mark Zagurski CLU®, ChFC®, CMFC® and CRPC®

Mark is a director of strategy and communications at Mutual of Omaha. With more than 30 years of experience, he has worked extensively in advisor development, strategy, and communications, focusing on helping advisors and their clients make informed financial decisions. He is also the host of the Mutual of Omaha Advisors podcast, “Make it Personal,” which explores personal finance and strategies to help you take control of your money and future.

Sources:

1. Investopedia, Net Worth: What It Is and How to Calculate It, October 2025
2. Investopedia, What Is a Tangible Asset? Comparison to Non-Tangible Assets, April 2025
3. Investopedia, Understanding Intangible Assets: Patents, Goodwill, & More, August 2025
4. Investopedia, What Is a Liquid Asset, and What Are Some Examples?, July 2025
5. Investopedia, Understanding Illiquid Assets: Risks, Examples, and Market Impact, September 2025

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc. Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

All investing involves risk, including the possible loss of principal and there can be no assurance that any investment strategy will be successful.

Real estate investing can be subject to a number of risks including but not limited to general market risk, liquidity risk, credit risk, structural risk, and leverage risks.  The strategies mentioned may not be suitable for everyone.

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