Investing 101 – Assets, Liabilities & Equity

Introduction
Dear readers, this is very first of a series of posts about the basics of finance and investing for doctors, and what better way to start by learning some accounting terms! Without knowing the nomenclature, it is impossible to discuss finance or investing.
The most basic concept in accounting is:

"Asset = Liability + Equity"

Asset
An asset is anything that brings value to yourself. This could be tangible like a house, cars, cash in the bank or shares in a company; or intangible like a patent, brand or even your reputation. For personal finance, we often only calculate our tangible assets as it is quite difficult to calculate the value of one's individual reputation for instance. I generally like to think of assets in two classes based on how easy it is to convert them to cash. For instance cash or shares are easily convertible, whilst a house is not. In purely accounting terms, total asset (with personal finance examples) is calculated from:

Current Assets: cash in bank...