Everyone wishes to be rich, not just in terms of health but also in terms of finances. Several aspects of our lives depend on our finances. What we eat, what we buy and the general standard of living is affected by our financial status. Just like our health is determined by our fitness, our financial condition is also determined by financial fitness. There are certain parameters that reflect our financial fitness. These parameters are

More assets

An asset is basically anything that will benefit you financially, either now or in future. For example, if you own a building and maybe rent it to another company who needs office space, then the building becomes your asset. Similarly, cash in the bank or cash in hand with which you can buy a diamond tennis bracelet or go on a holiday, is also considered as an asset. As an individual, if you have more assets, you will have more income and therefore your assets are something that will reflect your financial status. If you own land, any equipment or any other property which is helping you financially, it is an asset and reflects your financial status.

Less liabilities

Liabilities are those things which will cause an outflow of money from your account. The lesser your liabilities, the better will be your financial situation. Examples of liabilities include bank loans, salaries payable, bills and taxes. All these things require payments from your end and are therefore your liabilities. Liabilities are an essential determinant of your total profit and play a key role in reflecting your financial status.


The way you live your life showcases your financial heath in a huge way. If you have a big house, many other properties, wear expensive clothes and jewellery and go on international holidays three times a year will show that your financial status is good. On the other hand, if you are paying off a loan, living in a rented home and struggling to meet your expenses will mean that you need to work towards making yourself more secure financially. Hence, your lifestyle is the mirror of your financial status.

Emergency funds

Life is not predictable, and we never know when we might need money. Therefore, having an emergency fund for your emergency needs is essential. This also reflects the amount of financial security of an individual and indirectly represents their financial status. 


Insurance is different from an emergency fund and is like a cushion for your bad times. Today, several insurance policies covering your life, profession, automobiles and health are available. Smartly investing in them will mean covering and shielding yourself from the bad situations in life. For example, buying insurance for an expensive ring made of diamonds and sapphire hatton garden, will ensure that you get paid for it in case it gets stolen or lost. Most hatton garden jewellers will suggest you to purchase insurance. This will result in no net loss for you. Therefore, good insurance policies that protect you, reflect your financial status.


By Adam

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