Over the next few years big decisions will be made in Washington on jobs, the economy, taxes and deficits, energy, education, war and peace.

So over here you had another liability.

They're giving it to me for safekeeping.

So now I have this liability.

And let's say that's all of their liabilities.

liabilities.

Most times the liabilities are pretty easy to get a handle on.

This is 120,000 in equity, market value of equity, he has another 105,000 in liabilites.

The point I'm making is that it is a crime.

I owe the bank 750,000.

All its buildings and its employees and its brand.

So let's say these are debt holders right here.

This business is a good business.

It makes sense to pay off your credit card balance every month.

Or the other way to view it is, assets minus liabilities is equal to equity, right?

What I could do is maybe 100 of it,

And then we have the debt, the debt of the company, or the

I'll continue the example in the next video, and I'll explain a little bit about the tax savings from carrying debt or interest.

Minus 1.075 that was the max that I could borrow

I still owe 750,000 to bank.

Why? McGEE Don't know.

So where does this lead?

So liabilities. Liabilities.

Let's say assets and I'll talk about margin requirements

So you have an Accounts Payable liability of 100 sorry, at this point we had no Accounts Payable liability and then after the end of the month we have an Accounts Payable liability of 100.

I think I had called it Loan C.

This was equity.

We'll talk later about amortization schedules and how can you pay down the debt.

Now you could also have a yield curve for other types of debt.

that rectangle is much larger than it should be relative to 1,000, but I think you get the point then I'll do I'll have a liability here that says five gold pieces bank note outstanding.

And if I could liquidate all my assets and all my

This is the angel investor, and this is all of us down here, and all of this is equity.

So once again, if this is a balance sheet, this is the assets, here are your liabilities.

For the liability side of my balance sheet

And they got an asset called loan to Bank A.

This company now is completely delevered.

It had 5 million of debt.

So right now, the short seller, he has assets and

liabilities as well.

like any corporation, and they have to, the liabilities, plus the equity has to match up to the assets.

What are my liabilities?

Loan to Entrepreneur D.

But, unfortunately, let's say that I had

So this is essentially you have the government, you have the government, it has two sources of revenue that it can spend it has money from taxes, it has tax revenue, and then it can go out and borrow money, and so it also has access to debt markets.

Everything on the right hand side is equity, so this is all equity.