Turn Your Liabilities Into Assets
Did you know that you can turn your liabilities into assets with the concept of infinite banking?
Education is super expensive, but it’s one of those things that we don’t wanna sacrifice, which is the cost of our financial freedom. And it all starts with financial literacy.
Hi, my name is Sunny Mitra, founder of Bright Horizon Wealth. We teach entrepreneurs and go-getters like you how to own their financial future with the concept of infinite banking.
In the 90s a book by Robert Kiyosaki called Rich Dad Poor Dad came out and became an overnight success, and surprisingly, till this date it’s popularity has not gone down much. Even though for coming out of a banking background, I knew the definition and difference between liabilities and assets, something happened to me after reading this book. Long story short, it just hit me full force, and taught me that there are so many myths and misunderstandings about these two words, liabilities and assets. And Mr. Kiyosaki mentions it very clearly that unless you understand the real value and difference between liabilities and assets, you will keep on investing on new liabilities instead of assets.
So I’ll break down an asset. An asset is something that puts money into your pocket. So sometimes we think of our possessions as assets, but just take a minute and really look at those assets because are they putting money into your pocket or are they taking money out of your pocket? So just to reiterate, an asset is something that puts money into your pocket.
And on the contrary, a liability is something that takes money out of your pocket. So when we think of liabilities, we think of credit cards. When you make a payment it is taking money out of your pocket. When you make a mortgage payment, that’s the liability at the time. Because it’s taking money out of your pocket until you own it and it becomes an asset. So think about all the different things that you currently pay for that takes money out of your pocket. That is a liability.
Since, all our talks are rotating around infinite banking when it comes to banking, we need to start thinking like a banker. Before I get deeper into it let me ask you this trick question, “Do you know a bank has two buckets, one is deposit and other one is loan. Out of these two buckets, which one do you think is the liability and which one is their asset?” Let me give you a little hint, these banks think of liabilities and assets slightly differently than us, the consumers. Which is why a bank will look at its loans, as an asset. At the same time the bank will look at its deposits as liabilities. Before it becomes too complicated let me clear it up. If you look at the whole situation from a bank’s standpoint, you will find that all the deposits that bank has in their books, at some point or other they will have to give it back to their depositors, correct? Now look at their asset spreadsheet. This is the money that banks have given out to their customers as a loan. So, who has the ownership of these loans? You got the answer. It is the banks who have the complete ownership of those loans. So does it make sense if I say those loans are always in the asset column in their books. That is why banks love to loan the money. Because then at the end of the day they’re going to get back from their debtors, both the principal and interest. And that is the main source of income of a bank. So in other words, loans to the banks are the loans or the debt that they obtain from us. If you just think about it for a moment, you’ll find the answer yourself. Ask this question, why are banks investing so much money in their advertisement to loan the money out?
Now you might say, Sunny, I thought all the deposits that my bank has are their assets. Think for a moment again. We are putting the money in the bank as a deposit. What we’re getting back from the bank? A promise, through a contractual agreement. My bank would promise me the same amount back maybe even with some interest whenever I asked them to. And so the liability to the bank would be your deposit. So everything that we think of when it comes to our liabilities and assets, personally, it’s opposite to the bank. So as we go through infinite banking and we start putting some thought to things, it’s really the opposite way of thinking because infinite banking teaches us to own our own debt. And, right here rubber meets the road. When you start thinking like a bank, and act like a bank, you will gather the ability to turn all your liabilities into assets. All you need to do is, educate yourself and do exactly what your bankers do. And by doing so we can become our own banker. It’s not rocket science, and it all comes inside the infinite banking concept. All it takes is one evening to spend, and it will become clear to you that why and how by the virtue of banking you can turn your liabilities into assets.
And if you’re thinking about using your policy to finance other things, we have a free book called, “Infinite Banking Secrets” where we share different ideas on how you can utilize your whole life insurance policy. So definitely check out the link below and visit our masterclass
And remember to own your tomorrow by converting liabilities into assets.
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