Liability को Asset बनाना सीखो - How to Turn a Liability into an Asset? - YouTube

Can Liabilities make Money?

This might sound a bit awkward to hear

Because we have been taught that liabilities have to be returned

Money that we have to return

So, how do we earn money from this? we will understand this with the help of an example

We deposit our money in the banks, so if the bank is getting the deposit cash

Then the first thought that arise in our mind is that,

It is an asset to the bank because it is coming as cash

But if you see the books of the bank or the financial statements of the bank

The bank considers our deposit money in the FDs, savings account, current account as a liability

Because the bank has to return this money

So, the deposits are now in liability

And banks use these deposits to earn money, which means banks use these deposits to take loan

And earn interest on that loan, so, if banks can do this, then why can't we?

In this video, I will give you some examples which will show, how you can convert your liability to asset

And earn money from that

For that, we have to change our thought process

We will talk about everything in this video

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We have done made many detailed videos & playlists related to different investments, like

Stocks, Mutual Funds, Real Estate

How to start, where to open our Demat account, etc.

You will find links regarding all this in the description box

But we have not talked about Fixed Income Securities on our channel

Because this type of product was not available for retail

Fixed Income Securities are those where we can earn more returns than FDs (up to 9-10%)

And where risks are not high like the stock market or mutual funds

But now, in India these markets are opening, there are so many good products available for retail

So, I will talk to you about 1 such product at the end of the video

We will talk about our Income Pattern, Expense Pattern, Savings Pattern & Investment Patterns

We will try to understand, how the system is designed that rich people get more richer

If we talk about poor people

Generally, no tax is implied on their income because there is no tax on the income up to 5 lakhs

In fact, no tax is implied on income of the lower middle class

But, the expenses of poor people are equal to their income

And the savings left are almost 0.

So, in that case, there is a very low scope of growth

If we talk about, The Middle Class

Then there first comes, the Income

First of all, tax is levied on it

Then we are inculcated in it that we collect liabilities from whatever money is left

i.e. we should buy a car or a house or expensive gadgets or a phone or a laptop or go on an expensive vacation

And sometimes we think, if we do a fancy degree then our earning potential will increase

But if we try to understand, these all are liabilities

We are spending money for all these things

Here, I would like to quote Robert Kiyosaki, who wrote 'Rich Dad Poor Dad'

"A liability is something that takes money out of my pocket."

And, "An asset is something that puts money in my pocket."

So, if we talk about the pattern of the middle class, we will see that all the liabilities we keep collecting

Like, if we buy a House

It will cost us, high maintenance tax, high property tax, high loan EMI

The cost of the building always depreciate, and only the cost of land is appreciated with time

That means you have to pay cost of depreciation too

If you buy a car, its value also depreciate, & the cost of fuel, interest cost is different

So, when you do the total cost, your total expenses becomes high

So, firstly you earn money then you pay tax and then

We have done so many expenses because of all our liabilities

So, what will be the result

The savings will be minimum

And when the savings are minimum, we don't think about investing

This is the pattern of the Middle Class

Now we will talk about, Rich Mindset

If we talk about Investors, Businessmen,

When their income comes, firstly, they show their expenses

Assume, if the same person has done investment in a property (commercial property) on his company's name

Then he will charge depreciation , which means the expanse will be removed from the income

Then tax will be implied on whatever money is left, which means, low tax

Assets are increasing as well

I have also made a detailed video on the job vs business which has a calculation explanation

Here we get 2 results

The first result is when your expenses are minus from your income after the tax resultant is low tax

The second is assets are building

Means maximize investment is taking place is the first result

The second result because of investment money is compounding

This is called The power of compounding

If anyone invests 1 lakh at the rate of 10%, 15%, 20% every year, then it will also add in his wealth

When we had talked about middle class and rich mind set

Many people will give natural inclination for a rich mindset, but the system will not support them

But when we think, we have listened soo many rags to rich stories

We have soo many examples of poverty to wealthier

Was the law different for them or maybe they have changed the thought process

From where we could find this type of thought process

In my recent example, whether we should think like a Bank or turn our liabilities into an asset

Banks are converting their liabilities into an asset. The assets could be loans which are being given to peoples

In the books of the bank, all the loans are in the asset form

Could we do that? let us learn from an examples

If a person buys a car to run it in form of a taxi, many apps such as the zoom car app for this facility

People also use uber and ola and hire a driver

Many peoples give their car to the local taxi operator

Whether to use your vehicle when you have free hours and you don't use

The second option is, when you have 2 or 3 unused vehicle

You can discard 1 or 2 vehicles from them

and that money can be used as an investment

When we talk about the house it is not compulsory to buy a big house but only our need to be satisfied

Rest of the money can be invested to buy any commercial property or the house for the source of rental income

When the rental income starts the house is converted into asset, means the liabilities are converting in the asset

Let's take more example, if you want to invest in a gadget then buy that one which helps in improving productivity

Like if you want high configuration laptop only for watching movies then that will be negative

But from that laptop, you learn coding and your productivity increases than you must buy it

So, whenever we buy new things we should ask ourselves whether it is an investment or liabilities

Let's take one more example of the Education

Nowadays people do degrees of 10-15 lakhs & maybe their job may cost only 10-15 thousand

Then obviously it will become a liability if you have taken a loan for that degree then the loan must be paid

But if you have not taken a loan for that degree then that amount could be used as an investment for good returns

Here, we should consider education very seriously, if we are going for a higher degree & spending more money on that

Here, we should see if it is an investment or an expense

If we take one more example, this might become a sensitive topic to discuss

People can be assets & liabilities

Anyone who works in our organization can be an asset or a liability

When anyone is an asset? Let's assume, if anyone's salary

Is 30,000 or 40,000 or 50,000, but what return he is giving to you or adding value to your business can be in lakhs

Similarly, some people can be a liability

Who doesn't know their work properly but their expenses are high

We can take a little different example

Time can be an asset or a liability, time is something that doesn't come back

The time that has passed is now gone

Here, we can decide how we can invest our time

If we are spending our time reading a book or watching a good video or learning

Then that becomes a productive asset for us

But, if we waste our time watching T.V., different serials, from which we are not getting any learning

Then, we all know that this is not productive & it is creating a liability for us

So, I have given you some examples, you can apply this concept in different aspects of life

When you start to plan this way

You realize yours's savings start to grow

As we know when compounding is applied to investments, wealth grows by 2,3 times, or it has no limits

Friends, here we learned, how liabilities can be converted to assets, and increase our investments

And how can we benefit from the power of compounding

Now we talk about the fixed return securities

Suppose, we invest in mutual funds and get some returns. in that mutual fund comes between our returns

And charges some fees which he pays to NBFC's, corporates, etc.

If NBFC's borrows directly from retail market instead of borrowing from the mutual funds or banks

Means comes to investors like you and us

In this, that margin of middle can be reduced

Similar thing happing in this product

Wint wealth, basically tie-up with NBC's and raises funds for them

These funds are used by NBFCs' to provide vehicle loans, gold loans, housing loan

This money will be raised from us

The second question that comes to our minds is, if returns are higher than F.Ds then risk also high

Definitely have a high risk

If we invest in debt mutual funds there also bear some small risk extra

But the question arises that this risk is manageable

We see how Wint Wealth operate in that

The loans he gave with the NBFC's are secured loans like vehicle loans, gold loans, or housing loans.

This means; if someone defaults there is a mortgage against it.

In fact, this asset class seems very promising, many fintech CEOs and entrepreneurs also invested in it.

Like zerodha's Nitin kamat, CRED CEO

Groww CEO and many more

Because it is a new asset class we can definitely try it

Still, i will suggest you if your income is 10 lakh or above and your portfolio is more than 5 lakh, should try this

You can try by investing with 1 lakh, 2 lakh, in fact, investment in this starts from 10 thousand

I gave you the link of the product in the description box

And I suggest that after opening the account read the details carefully to understand the product then invest in it.

If you want to know more about fixed income securities and about this product

Let me know in the comments box below

That's all in this video

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See you in the next video, Till then keep learning, keep earning & be happy.