Terminology
- Financial liability
- An obligation or debt between one party and another which has not been fulfilled or paid for (mortgage balance, car loans, student loans, etc)
- Legally binding liabilities
- You must pay back the liabilities or you face consequences
- Long term liability
- Payable over a long time (ex. mortgage)
- Short term liability
- Payable within a year (ex.credit card bill)
- Not a problem if it’s worth it in the long run (student loan for university and high paying job), but a problem if they exceed your Asset or interfere with your ability to pursue financial goals