Short transcript excerpt from a YouTube video (Richard Canfield) discussing how wealthy individuals manage loans by using guaranteed appreciating assets so that the asset’s cash value can outgrow the loan; emphasizes the need for business owners to understand contract mechanics and have clarity on financial tools before committing bank money.
Chapters
A loan will grow. But if I could show you how a guaranteed appreciating asset will at some point have more cash value than that loan guaranteed, then it becomes a check my checking account and not a daunting loan.
When you really understand what's going on inside of the contract, which why when you set something up for anybody, an individual business owner, you've got to affirm that they have clarity on the tool. If they don't have clarity on the tool then that is going to come up. If you're looking at it where you're examining your numbers as a business and you have maybe somebody within your your professional network, whether it's your accountant or someone who may not have been acquainted with the solution and they start going can you do me a favor and pick up every red flag you have on your desk because I just need to ask you about why you're putting the bank's money into this thing. You're building up a loan balance.