By Gabriele Denaro · Published 20 September 2026 · Updated 6 October 2026
An asset is something you own that has value: savings, investments, a home, a car. A liability is something you owe: a mortgage, a loan, a credit card balance, a tax bill. Net worth is assets minus liabilities. It sounds mechanical, and it is, but the two lists behave very differently over time.
Say your net worth rose by €10,000 this year. In one version your investments gained €10,000. In another you repaid €10,000 of a mortgage with money from your salary. The final number is identical. The first depends on markets and can reverse next year. The second came from your own cash flow and stays. Looking only at the total, you cannot tell them apart.
A home worth €200,000 with €150,000 still owed leaves €50,000 of equity. If its market value rises to €220,000, the debt has not moved and the equity is now €70,000. If you only record the equity, you cannot tell whether you paid down the loan or the price changed. That is why Patrimony records the remaining debt separately on each asset in My Assets, instead of showing a single net figure.
Calling debt good or bad misses the point. What matters is what it financed and what it costs. A mortgage at a low rate on a home you live in is a different decision from a credit card balance carried at a high rate. The good debt vs. bad debt guide goes through that difference.
For loans, record the capital still owed, which appears on your bank statement or amortization schedule, not the total of installments you have paid. A large part of early mortgage payments is interest, which does not build equity. Updating the outstanding balance once a month takes a minute and keeps the liability side honest.
General educational information, not personal financial, tax or legal advice. It may be incomplete or out of date. Terms of use.