Financial Word of the Month – Property
Property – rights, benefits, or interests related to ownership.
Property and possessions are NOT the same.
Property is a legal recognition of ownership to determine how an asset (or possession) is to be owned, controlled, distributed, transferred, discarded, valued, and/or taxed.
For example, personal property conveys your personal, legal right of ownership to an asset (possession) whereas the asset is the possession that is actually being owned. An asset will either be a:
- Tangible, immovable asset
- Tangible, movable asset
- Intangible asset
Another example is real property vs. real estate.
Real property is the right, benefit, or interest related to the ownership of the real estate whereas real estate is the asset that is being owned. Typically real estate is an immovable asset; this includes:
- Trees and Minerals
- Plant [Machinery] and Equipment providing services to the building
- Mechanical work providing services to the building
- Electrical work providing services to the building
- Commercial Buildings
- Residential Buildings
In other words: engaging in a transaction in which you legally bind yourself to SACRIFICE the income you will generate in the future by giving it to another person or entity. If you can no longer sacrifice that income, then you agree to transfer anything to them that a consumer is willing to pay MAXIMUM amount for in a free market economy.