“Risk is not volatility. Risk is the permanent loss of capital.” This simple yet profound distinction by Howard Marks reshapes how we think about risk management. Many people conflate risk with short-term price swings—volatility—but true risk is far more consequential. The Misconception of Risk as Volatility The stock market goes up and down daily. Headlines …
In a personal net worth statement, we normally classify car as an asset (click here to learn more about net worth statement). Owning a car is often seen as a rite of passage and a symbol of independence. However, is it really an asset that is able to generate cash or a liability that drains …
In the world of personal finance and investment, the classification of real estate as either an asset or a liability has been a subject of much debate. While some argue that real estate is a solid asset that appreciates over time, others contend that it can become a liability, draining resources and tying down capital. …
In personal finance, the term “liability” often conjures up images of debt—credit card balances, mortgages, car loans, and student loans. While these are indeed common forms of liabilities, the concept of what constitutes a liability is broader than just financial obligations. To truly understand and manage your financial health, it is essential to rethink and …
