So, if I were to draw a balance sheet for someone's house, it would look something like this.

Sal Whatever's left over is your equity.

And that loan wouldn't be a bad idea because if this person isn't lying about their balance sheet, or I'm not

I'm only going to get 50 gold pieces back.

All of these banks, each of these kind of represents the balance sheet of a bank.

I care about the assets.

But the underlyingconcepts really aren't that fancy.

This is kind of my whole personal balance sheet.

And just so you don't get confused, there's always a

So we had 1 million and then we raised 10 million more.

And all companies don't have the same amount of shares.

Or assets minus liabilities is equal to equity.

Let me explain it.

Frankly, it doesn't have to be a bank.

And let's say these are its assets right there.

But we can see I've drawn a bunch of balance sheets before and I think this is a good time to draw a balance sheet.

So I'm going to describe what illiquidity means to you.

But it doesn't hurt to review it here.

And the difference between is kind of like your wealth.

That's not too hard to value.

Above this line right over here is the income statement, down here is the balance sheet.

And this isn't the balance sheet just for my house.

So going into day 10, this is his balance sheet

But anyway, back to where we were in the example.

Let me draw another series, another balance sheet.

So in this situation, what are my assets?

So in this situation, what happens?

Day 10, he decides to cover.

There's the income statement and the other two are the balance sheet, which I have drawn a lot in a lot of the other explanations I've done on the financial crisis and whatever else.

But anyway, I won't make social commentary.

let me do demand in a different color.

So let's see where we left off.

I want to have money back in my vaults.

But we'll just assume we start a corporation.

And maybe I'll do a little bit more on that in the future.

Let me scroll down a little bit.

Obviously, this is simplified.

But that's getting too philosophical.

And income statements tell you how do you get from one balance sheet to the next balance sheet?

And it really just kind of gets rid of a little nuisance.

liabilities, that's hard to get a grasp on.

And that's why they call it book equity.

So what happens?

I only have 650,000.

And you're going to make much more than this.