Sarba and Peter explain how to use the Infinite Banking concept to control your own banking function. They show how a $50,000 car loan works differently when you're the banker instead of the borrower, and how money flowing toward your system becomes an asset instead of a liability.
What you call asset, which is your deposit in the bank, the bank call it a liability. Your loans, your car loans, to a bank is a liability, but to the bank, it's an asset. So again, what you call asset, they call liability. What they call asset, you call liability. In the end, who has all the money?
In this video, we're going to talk about how to convert liabilities into assets by becoming your own banker. Sarba, let's dive into this video.
Oh, Peter, let's just dive in. And before we start the video, I just want to say one thing. For anybody watching this video. If you haven't read this book called Becoming your own banker, unlock the infinite banking concept by R. Nelson Nash, I just want to say that you have an opportunity today to get a copy of this book and, and to order yourself a book. Please check out the link in the description of the video. All right, Peter, let's just dive in. Now let's define a liability from a banker's perspective. And then let's also define an asset from banker's perspective. Now, a liability is something that is going to cost you money, right?
Right.
Costing you money, meaning the money is flowing away from you. It is flowing into someone else's banking system. And that is what a liability is even to a banker. That is truly the liability, the money flowing towards someone else's banking system. And someone else gets to use that money. It doesn't matter what goods and services are you buying, if the money is flowing away from your system, it is a liability. Now in contrast to that, an asset is something in which, because of the function of banking, because you're the one controlling the function of banking. Now the money is flowing towards your banking system versus away from you.
So from the banker's perspective, liability is money flowing away from you into someone else's banking system. And asset is something in which the money is flowing towards your banking system so that you get to reuse the money again. Now, to expand on that, let's use a example. So, Peter, if today you go to a commercial bank and you want to deposit money, let's assume it's $50,000, you deposit 50k into a commercial bank. Now your deposit into commercial bank, is that an asset to you or is it liability to you?
Well, that's absolutely an asset to me.
Because it's your money.
Yeah.
Now, to a commercial bank, if you're the bank, what do you think is that money to a bank?
That money is a liability to the bank because that's money that they owe back to you and they have to.
Pay you interest and they are also responsible to make profit for the owners of the bank. So they have to put that money to work right away. So let's just say somebody is buying a new car and it's going to cost him 50k. So they come to the bank and then they borrow that money as a loan. And the person who's buying the car now, they exchanged that money for the car and now they're making steam of payments back into the bank where they borrowed the money from to a car purchaser, that loan to the bank for the car, is that an asset to the car purchaser or is that a liability to the car purchaser?
Yeah. To the car purchaser, those payments are liabilities.
Yeah. Because the money is flowing away from him into someone else's banking system. Now, the banking system to which the money is flowing into, is that payment now an asset or liability?
The payment to the bank is an asset. Absolutely right.
So what you call asset, which is your deposit in the bank, the bank call it a liability. Your loans, your car loans to a bank is a liability, but to the bank it's an asset. So again, what you call asset, they call liability. What they call asset, you call liability. In the end, who has all the money?
No matter how whatever way you explained it there, the money's still sitting in the bank.
At the end of the day, nothing happened to the flow of money without the process called banking. And someone has to perform that function for you. If you are not the one controlling that function for you, the money is leaving you. So all those transactions are liabilities. But if you now control the function called banking and the money is coming into your banking system, then all the exchange of money that you've been doing now become assets. All those transactions are assets because the asset is the stream of payment. So going back to the example of this person who bought a car to convert his liabilities to his assets, all he has to do is control the banking function and the money starts to flow towards his banking business versus someone else's banking business. So if you want to convert your liabilities to assets, all you have to do is just control the banking function.
Because nothing happens with the flow of money without the function called banking. You're familiar with it, but are you truly controlling it?
Right.
And that's so simple. And it's all about this video is about converting liabilities and assets in relation to the banking function. To learn more about this process of becoming your own banker, the infinite banking concept should click on the videos here, on. On the. On the site. You're gonna. You're gonna get tons of videos and content on the banker's vault, on the process of becoming your own banker.
