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Accounts Vs. Assets


This post is gonna be short, but it's very important. I've been seeing people drop comments in the DM's and my email of them referring to their 401k's, IRA's, and Brokerage accounts as Assets. These are not assets! They are simply accounts.


There is a stark difference between assets and accounts. Your checking account is not an asset. Your savings account is not an asset. They are just accounts within which you store your cash. The cash that is inside the accounts is the asset.


I don't want to get too nit picky about this, but it is an important point to drive home, as we are looking to get more financially literate and we should understand the terminology.


A brokerage account is just that. It's an account. Same with a 401k and an IRA. These are just accounts within which you buy assets like stocks, bonds, commodities, index funds, etf's, etc. The assets within the accounts are the ASSETS. The accounts are not the asset!


Please understand this difference. Understand that just because you have a 401k or an IRA or a brokerage account does not mean you own any assets. It's what's inside those accounts that counts.


So please just be aware of this subtle, yet super important distinction: A brokerage account, 401k, and IRA is NOT an asset.


Stocks, bonds, Index Funds, Cryptoassets, ETF's, Options, etc are the ASSETS. You need the ACCOUNTS to buy the ASSETS.


Got it? Good!


Happy Investing,


The Layman Investor

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