Balance Sheet

Please read the disclaimer first.

I'm going to do some light research on accounting, since Scott Adams mentioned that it's a good thing to do in his book.  :)

The Balance Sheet is a financial statement that represents a snapshot of your current value.

It is sectioned into three parts.

Assets go on the left and Liabilities go on the right.

The difference is shown as Equity, under liabilities.

Both sides should add up to the same amount and balance, hence the name "balance" sheet.  :)

Your assets are what you own, stuff like cash, bank accounts, your home, car, etc.

Your liabilities what you owe, are stuff like mortgage, loans, debt, etc.

Here's an over-simplified version of our balance sheet.

Good thing we have positive equity now, since we were underwater for a while after the housing crisis...