So this is just another visual representation that

liabilities plus equity is equal to assets.

And then the equity is, essentially we would look at this formula.

liabilities.

And in this example here, where I said this is some type of a financial institution.

So I'm going to give you a little equation, actually, just to take a little bit of a tangent.

My liabilities would be 145,000.

900 gold pieces I lend out.

So 9 million in loans.

There are a billion and a half left.

In a world without leverage so if I didn't have all this

So I have 300, 400, 700, 1,000.

And so you can see very simply that assets I'll write this down, you're getting a little bit of a introduction to accounting right here but assets are going to always be equal to liabilities plus equity.

So I have 100 plus 300 plus 250 so it's 100.

let me give you that piece of terminology, it just means net asset value.

And this is another important thing to think about.

So they really had, let's see, they had an 80,000 loan, a 250,000 asset, so they really had 250,000 minus 80,000, that's 170,000.

So then he's done.

I don't want to draw this box.

So whenever they get this money into circulation they do go out there and they do buy assets usually treasury assets, and then they say even, Indeed, although the bank of Japan's policy, so he's comparing relative to what Japan did when they kind of faced deflationary crisis.

I still have no liabilities

But let's just look at what they're saying.

It doesn't sound like we borrowed money or anything.

Each share in this case once again, if you believe that the assets are worth 1 million are going to be 1 million.

Things like that.

It's not like I didn't have any cost here.

Malibu Equity and Investments. Roger Van Zant.

So once again, it's just a loan to someone else.

So its assets.

I'll do that in yellow.

Because essentially, or you can view it this way, if you subtract liabilities from both sides, assets minus

He is a man of considerable means.

Obviously , a machine you can't do all of those things to it, but you can at least touch it and possibly smell and taste it.

I don't know if someone dancing for you is an actual economic benefit, but you get the idea.

So this is the assets.

And why is that?

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

So let's say when we liquidate it so we go into bankruptcy and essentially all of the assets are taken into possession by the bankruptcy court they're going to sell these assets.

That assets, A for assets, is equal to

And, of course, that will throw the girls into the path of other rich men!

And you know, that will throw the girls into the paths of other rich men!

Or across the street from each other.

So cash could be an asset.

One of the viewers pointed out not incorrectly that one definition of return on asset so this whole video's going to be on return on asset that one definition of return on asset, and if you look it up on some of the finance sites or even some finance textbooks, they'll tell you it's net income over total assets.

But let's say its assets are worth 1 million.