Liabilities (DEBT) Explained | MILLIONAIRE MADE by MANAGING RISK
0:00 - What is a Liability?
0:48 - Consumption leads to Liabilities
2:15 - How Debt adds Risk
3:51 - The Secret
5:09 - #WatchToTheEndClub
Liabilities complicate things. That's a fact. The addition of debts and optional obligations to a financial plan makes simple concepts more complicated.
Most people see the word liabilities and equate it to debts and loans. However, there are a number of other products and services that fall under liabilities!
📝 Loans
🧮 Accounts payable
📉 Deferred revenue
🏘️ Mortgage
🔫 Bonds
💵 Built up expenses
In the video, we talk about how adding liabilities (or too much debt) to your financial plan adds risk. Risk minimization is a tactic of limiting or avoiding unneeded risk when diving head first into a plan. As someone who also lives in the real world, I understand risk elimination is not possible. There is absolutely no guarantee something will work out.
You might lose money when you invest in stock.
You're house might lose value right after purchasing.
The real estate investment property might not rent right after it's ready.
People might not buy your product.
You may not have a job right out of college.
That's why it's important to acknowledge the potential downsides to a major decision.
With student loans as the main example in this video, I discuss why there is risk associated with taking out unreasonable sums of money to go to school. What good is the $1 million dollars extra over the career if you throw it all at interest?
Music by: @dcuttermusic
https://www.davidcuttermusic.com/
No Words (Mosquito Beat) - David Cutter Music
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