In simple terms an asset is something that puts money in your pocket and a liability is something that takes money out of your pocket.
The first house you buy is normally a liability as you will live in it and pay the monthly outgoings. A second house you own can be an asset or a liability depending on how you have bought the house, weather it has outgoings and whether it draws rental income.
Is car an asset? The answer is a big No. A car is a depreciating good which does not even preserve the invested capital. The moment the car is bought it has already depreciated 30% of its capital investment.
A rule of thumb is to have enough cash flow so that the assets draw enough income for you to pay off your liabilities. This is what can be called as financial stability.
One should also keep a small corpus as contingency as this will come handy on a rainy day.
The asset v/s liability becomes a blur the moment an asset is listed as collateral for drawing car loans, jewellery loans or any other loan.
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