In the hustle and bustle of modern life, in a world that is more and more commercially driven, the well being of a person is particularly dependent upon their resources. Since Western modern societies have shifted away from being predominantly agriculturally based, the focus of valuable resources for the average person is quite firmly centered on the particular financial resources a person may have at their disposal.

Often the term ‘asset’ is associated with the serious finance of corporations, and particularly frequently in an accounting context. Quite simply, however, an asset is anything that a person may possess within their control that is able to be readily converted into cash.

Assets come in various forms and can include anything from actual cash, to balances in a bank account, stocks and bonds, possessions, buildings and land, equipment, and even extend to what are known as ‘intangible assets’. The latter are able to be converted into cash but are unable to be physically handled because they are in the form of a right or entitlement. Such things as a patent or a copyright, or the goodwill of a business may be termed as an intangible asset. Many businesses choose to protect their assets through a business life insurance policy, enabling them to protect shares, key people within the company or their employees.

Of course, as reluctant as most of us are to undertake a lengthy study of accounting and economic theory, it is interesting to note that all of us engage in some form of accounting analysis each day.

Every day we participate in an economy where we pay others for the privilege of consuming goods or services. The ability to pay for these valuables stems from the assets that we already have control over, or assets that we create by receiving payment ourselves.

This ability or purchasing power to pay for things that we need is entirely dependent on the flow of ‘value’ or money. However, just like any dam full of water, if it isn’t topped up it will eventually run dry….

So herein lays an extremely important issue.

Any discussion of assets necessarily includes the recognition of what are known as ‘liabilities’ and these include the debts or financial obligations that a person owes to others already, or those that they will owe at a time in the future.

Given that an asset is something that can be converted into cash, if a person were to convert all of their assets into cash and then repay all of their debts, bills or ‘liabilities’, then the excess balance would be what is known as financial equity or ownership.

If, of course, the result is that there are liabilities left outstanding, then we are presented with a person who has negative equity and is really one who, without financial recovery, is living on borrowed time before the inevitable conclusion is drawn that creditors are unable to be paid.

This condition has a number of consequences, the most serious of which may be in the form of bankruptcy, which is a formal and legal declaration that a person’s creditors are unable to be paid. This may lead to restrictions being imposed on a person that restrain them from the full participation in economic life that other people enjoy. Concessions often need to be made, such as giving up smoking; worthy of noting is that non-smokers enjoy much lower premiums on life insurance, whereas a smoker’s life insurance premiums are often up to 50-60% more expensive than a non-smoker’s. Clearly, this demonstrates the need for sound asset management.

Some banks offer to open bank account with zero costs, some with monthly fees, and others with annual fee. There are different types of income, including:

• A monthly / annual fee to the payment is monthly / yearly through a fixed figure for spending; replacing almost all the commissions for banking services and account management licenses (may be extra charges for certain services). The current knows in advance the amount to be paid each month / year. The interest rate is low;
• No cost: Auditors also called “zero cost” or “light.” “No charge” means no fees or costs of standard, but not free. The majority of these accounts include costs for some functions, such as sending the ‘bank statement or stop the levy on ATM of other banks. The interest rate, again, is very low;
• Via the Internet, the transactions are executed by the computer at home or office, without having to visit at the bank. Compared to traditional accounts, the costs are lower;
• Family: the type of account designed to be used by more people. The advantages are related precisely to this feature: for example, may be a reduced cost for the second credit card;
• Youth: among the targets selected by the banks are wide spread current accounts and services for young people and students. For example, accounts are set aside for boys aged between 18 and 26 years (current young). The distinctive features of these accounts, which differ from the traditional target for the “adult” conditions, are particularly favorable for the management of transactions in both the credit card and ATM. Also offers additional very interesting and include, for example, subscriptions to magazines and purchase of PCs. The monthly costs are reduced, usually standard, and include a predetermined number of transactions, sometimes even unlimited.
• Many banks also extend those privileges to those who are undergraduate or post-university and have passed for some 26 years.

To assess a bank account should be checked:

• The presence of the monthly fee.

Regarding the cost side should be taken that are included or not the following services:

• The cost of sending of the statement of account;
• The costs of liquidation;
• The carnet of 10 checks;
• The local utilities;
• The operation excess.

In terms of banking services, it is good to consider these factors:

• The number of operations: limited or unlimited;
• Credit card: free or fee;
• Debit cards: free or fee;
• Prepaid card: free or fee;
• Opportunities for Internet banking;
• Deposit securities: free or fee;
• The estimated expenditure for 1 year;
• The estimated expenditure for the years ahead.