Savings and Financial Security
Why Assets Matter
Assets are tangible and intangible economic resources – a home, savings in a bank account, a college education – that can produce value for their owner. “Asset building” as a strategy to help families escape poverty emerged in the early 1990s, inspired by researcher Michael Sherraden’s assets-based approach to poverty alleviation articulated in Assets and the Poor.
The essential insight from Sharraden’s work was that assets can matter economically, socially and psychologically in ways that income alone does not. More recent research has reinforced this insight: that income –by itself – is necessary, but not sufficient, to allow families to escape poverty, achieve financial stability and move up the economic ladder.
CFED’s Policy & Research team created a short fact sheet that provides an overview of research on assets and their effect on financial stability and economic opportunity. Many research studies have shown that:
- Assets create a financial buffer to weather emergencies
- Assets can promote success in the labor market
- Assets can promote long-term thinking, planning and psychological well-being
- Assets can promote economic mobility for single mothers
- Assets can enhance the well-being and life chances of children
- Assets can increase the likelihood of going to and succeeding in college