Reference

Glossary of personal balance-sheet terms.

Vocabulary that turns up across personal-finance literature in Australia, the US, and the UK. Each entry is short and links to longer treatment where one exists.

AFSL: Australian Financial Services Licence. The licence required for regulated investment advice in Australia. Verifiable on the ASIC Financial Advisers Register.
ABS: Australian Bureau of Statistics. Publishes the Household Income and Wealth release, the source of Australian net-worth cohort medians.
APP: Australian Privacy Principles. The 13 privacy principles that govern personal-information handling under the Privacy Act 1988.
ASIC: Australian Securities and Investments Commission. The regulator of financial services and corporate behaviour in Australia.
Asset: Anything you own that has economic value and could be converted to cash. Listed at realisable value on a personal balance sheet, not at purchase price or aspirational value.
Asset-to-liability ratio: Total assets divided by total liabilities. A ratio of 1.0 means assets exactly equal liabilities. The figure is more stable across the wealth distribution than absolute net worth.
BNPL: Buy Now, Pay Later. A consumer credit product (Afterpay, Klarna, Affirm). Interest-free if paid on schedule but typically charges high penalty fees on missed payments. Active BNPL accounts count as liabilities.
Concessional contribution: An Australian super contribution made from pre-tax income, capped at $30,000 per year (2025–26). Includes employer contributions and salary-sacrificed contributions.
Debt-to-asset ratio: Total liabilities divided by total assets. The inverse of the asset-to-liability ratio. Below 30 % is conservative, 30–60 % is typical for a mortgage-holding household, above 70 % is leveraged.
Equity: The corporate-finance equivalent of net worth. Also used in real-estate context to mean the difference between property market value and outstanding mortgage balance.
Emergency fund: Cash held against income disruption or unexpected expense. Conventional advice: 3–6 months of expenses. Households with substantial liquid taxable investments can defensibly run a thinner cash buffer; see the liquidity page.
Federal Reserve SCF: Survey of Consumer Finances. A triennial US Federal Reserve survey of household balance sheets, the primary source of US net-worth cohort medians.
HECS / HELP: Higher Education Contribution Scheme / Higher Education Loan Program. The Australian government-backed student loan, charged at indexation rate (CPI), repaid via the tax system above an income threshold. Counts as a liability on the balance sheet but with notably softer terms than US private student loans.
Leverage: The use of borrowed money to acquire assets. Magnifies both gains and losses. Measured by debt-to-asset ratio.
Liability: An amount you owe. Listed at current outstanding balance on a personal balance sheet, not at original loan amount.
Liquidity: The ease with which an asset can be converted to cash. The 90-day rule defines “liquid” as convertible to cash within 90 days at less than 5 % loss of value. See the liquidity page.
Liquid net worth: Liquid assets minus short-term liabilities. The net worth available to deploy in a financial emergency.
Net worth: Total assets minus total liabilities. The headline figure on a personal balance sheet. Computed by the calculator on this site.
OAIC: Office of the Australian Information Commissioner. Australian privacy regulator; receives complaints about APP breaches.
Owner-occupied vs. investment property: An owner-occupied home is the residence; an investment property is a rental income asset. Both count as real estate on a personal balance sheet at current market value, but their cash-flow characteristics and tax treatment differ.
Preservation age: The age at which super can be accessed in Australia (currently 60). Super balances below preservation age are illiquid for net-worth-flexibility purposes.
Salary sacrifice: Pre-tax income redirected to super. Reduces income tax (because pre-tax money is taxed at the 15 % concessional super rate rather than your marginal rate) and increases super balance over time.
SCF: See “Federal Reserve SCF”.
Super / Superannuation: The Australian compulsory retirement-savings system. Employer contribution rate is currently 11.5 %, rising to 12 % in 2025. Counts as an asset on the balance sheet but is illiquid pre-preservation-age.