Info 1: personal assets definition
Info 2: how personal assets work
Info 3: personal asset vs business asset
Info 4: example of personal asset
Opening information:
Personal asset breaks into two words personal and assets. personal means private and asset means items that produce cash flow. Personal assets are private items that produce cash flow.
So now let’s have a look at what is personal assets, how personal asset works in the public market among Corporations, and what is the difference between personal assets and business assets, finally one clear example of personal assets.
Info 1: Personal assets definition
Mr.Pather is the CEO of the Steel Industry, where it’s been not started by pather but it’s had been started by his friend Makki.
For a long time, Pather is the man who works together with Makki.
So Makki handed over the Industry to the pather, therefore he has been the CEO and successfully run the business for nearly 12 years. And the pather had 150 million dollars in net worth once he paid all his liabilities.
But 150 million dollars is not a business net worth despite the steel Industry being worth 23 billion dollars. These 23 billion are computed by the value of the equity of the business with a multiple of total issued shares.
Pather also had a compensation package every year for the risk he took for the businesses, without any includable salary. This steel is a public Corporation whenever it goes bankrupt the holding share of the father in the company would be affected.
But his net worth of $150 million which is owned by him without business involvement, which are affected because of any bankruptcy acquired.
Here the 150 million dollars which are held by the pather in his net worth is what is named as personal assets. So now let’s dive into how personal assets are involved in the market.
Info 2: how personal assets involved in public market
Personal assets don’t represent any of the specific fixed assets or objects, instead, it’s things and materials owned by the individual without the involvement of any outside business or Industries.
Therefore any of the people who had the remaining value of assets after paying all their private liabilities are considered a personal asset.
Suppose such individual-owned asset is controlled and gained in the part with any other one or more persons that are not categorized as assets that are trapped in the personal.
Any of the stock or public Investors who hold a large portion of the Corporations in the share market would never lose their assets because of holding a part of Ownership in the public organization.
For this reason, whenever any kind of Investor purchase happens in the business shares they are buying the Ownerships and provide the responsibility for the business using the Holden Corporate assets.
So when the business got ruined or acquired by an outside Industry or bankruptcy would only affect the business assets, which didn’t have any single relation to their holding personal assets.
On the other hand, the person who is a CEO of a public business and also who holds a stake in the Ownership Industry would not lose any personal assets the reason for bankruptcy in their company.
The same person would hold his assets in the business money which they are not elaborate as an asset of personal things. Most people confuse personal assets and business assets so let’s jump into the key difference in it anyway.
Info 3: personal asset vs business asset
The difference between personal assets and business assets is, that personal assets are one that only belongs to one individual human, they can’t be mingled the any other second person.
On the other side, business assets are the ones that refer to the cash flow items that belong to any number of amount of persons. To make you more clear about personal assets, let’s look at one clear example below.
Info 4: example of personal assets
Say you are the CEO of Company H, where Industry H would have 240 million dollars in assets and you own 40 percent of the company.
Were that 40 perfect is about 96 million dollars assets belong to you, and the remaining assets belong to some other Shares holders. Imagine Apart from the business you had, you normally had real estate assets without any debts which is worth 12 million dollars.
Here 96 million dollars in assets are owned by the business with multiple shareholders, and 12 million dollars only belongs to you without any other individual involvement.
So when company H went bankrupt your business’s 96 million dollars owned assets got ruined but your assets won’t, when your liabilities affect you it’s ruined the personal assets otherwise it won’t.
Or if your business has only one owner that is you, it’s sure to affect and disaster everything, because when you’re the only person who owns the whole Industry, it’s become personal.