Defining a asset

What is an asset...
According to Wikipedia it is defined as

"In financial accounting, an asset is an economic resource. Anything tangible or intangible that can be owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent value of ownership that can be converted into cash"

So the key points in the above is .. owned, produce value and held to have positive economic value.

These points are critical to understand when we would like to define assets... especially when we would want to achieve financial freedom.

To me , I would only try and refine this to owned and produce value ( income) as an asset. The third point if it does not enable to produce an income then I would not consider it as an asset.

An asset should enable value to be generated in the form of income either now or in the future.

It is critical to understand the difference.. a holiday to Singapore for fun and family time is creating value.. but not economic value .. so from a financial stand point it is an expense. 

Buying a car for personal use .. or an upgrade of a car is not an asset... but if you bought it to use it even partially to drive an income.. Eg using it for sales of your business or to become an partner in the uber or ola world... then it becomes an asset . The difference in the two is using the asset to generate income.

A house even though most would consider an asset can be sold in the future ( though that is always a very difficult decision) but an upgrade to a house which you were never planning to sell is not building an asset.

If you bought a house and then sold it or rented it out to generate an income.. that would be an asset.

An good decent phone .. a smart phone which you use for your official work .. is an asset. But upgrading every year to a new iPhone  ( iPhone 8 is coming out ) is by no means enabling you to do better work or make more income .. and hence not an asset

It is critical to understand the difference and how the usage of the product actually defines if it is an asset or not.

Understand this well.

Drive this in your daily life.. it's simplefinancialsense.