Personal wealth


Personal assets are the resources available to an individual once the financial commitments or obligations that they must face are discounted.

Personal wealth serves as a tool for balancing or measuring the possessions that a certain individual has at a certain time. Obviously, the greater the wealth of a person, the easier it is for them to face new obligations or financial responsibilities.

Accurate knowledge of personal assets is important and useful for a person. Above all, when it comes to knowing exactly and safely if you are in a financial position to undertake new projects or purchases without putting your position at risk.

In the same way, the study of the evolution of personal wealth allows anticipating future states of the same. Since in the face of different changes in the economic environment, personal assets may change. Only by knowing when our personal heritage is favored can we expand it. And even more importantly, only by knowing the moments in which our heritage is in danger can we protect it.

The origin of the patrimony, on the other hand, can respond to purchases or acquisitions, to assignments between individuals or to inheritances and successions of a family nature.

Personal equity as the difference between assets and liabilities

In this sense, as assets we consider the money saved or invested in shares, deposits or private pension plans, future remuneration in the form of payroll, real estate in favor and other movable assets such as valuables or works of art.

On the liabilities side, we could identify the different debts in which the subject in question is committed. An example of this may be a home mortgage or a loan that you have had. In this sense, it is important to include in the calculation the corresponding volumes of interest that go hand in hand with said debt obligations.

Distinction between personal and professional assets

Personal assets are by law the private property of the individual. That is, it is part of your ownership. On the contrary, business assets correspond to those resources intended solely for the development by the latter of an economic activity.

In this sense, it is not the same for tax purposes owning a home as a commercial premises for economic purposes.

Another example of this occurs in limited liability companies. In limited liability companies, the partners do not respond in case of financial problems, with their personal assets. In other words, if there is a loan in the name of the company that the company cannot meet, personal assets are not compromised. In other words, it is perfectly differentiated from the professional heritage.

Of course, there are occasions when, for legal reasons, people must respond with their personal assets to obligations arising from professional activity, especially in situations of seizure of assets used as collateral.

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