So he owns it outright so all of the 100,000 of asset value is actually his equity.

This was not a cash expense, so from our operations we had 50,000 dollars,

So they did build some equity through housing appreciation, just the house didn't go from 100,000 to a 1,000,000, it went from 100,000 to 250,000.

So how much wealth is gone from each person's perspective?

But what if this equity is worth zero?

And what is required is a combination of physical capital, institutional capital, human capital and security, of course, is critical, but so is information.

That assets, A for assets, is equal to

But we'll do a whole playlist on that.

So 26 minus 23 is equal to 3.

And then on the equity side, because we have no liability, so in this case assets will be equal to equity.

liabilities really are only 105,000.

Or think of investment.

less capital intensive that there's less money that's required

like sustainable development targets, natural resource governance targets, access to opportunity, to knowledge, equity, fighting corruption.

It should start to make a little bit of intuitive sense

And it's legitimate monopoly of means of violence, administrative control, management of public finances, investment in human capital, provision of citizenship rights, provision of infrastructure, management of the tangible and intangible assets of the state through regulation, creation of the market, international agreements, including public borrowing, and then, most importantly, rule of law.

I'll do that in yellow.

One, what shares are share of

This is all just to print out the chart at the end so that we can take a look at it.

But they're unsecured.

liabilities plus equity.

Because the balance sheet is often called the company's books.

I use 100 gold pieces.

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

If it had 10,000 shares, and actually both of the shoe companies had 10,000 shares, then the market is essentially valuing the equity of Ben's shoe company at 215,000, even though the book value of the equity was 135,000.

I still owe the almost 1.075 million.

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

So this is just another visual representation that

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

Good health is his capital.

Really Execute Remote Script?

liabilities.

So now it's getting interesting.

This is their current assets, and let's say that is is their liabilities over here, so liabilities, and then this is their equity, although the federal reserve's equity is a little bit strange, it's not like traditional equity, that they get all the excess profits and all of that, all the excess profits actually go to the US government.

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

In return on equity, the numerator is the net income that we got, so it's 350,000.

Capitalist country.

They'll often say just like a big bucket of, they'll call them level three assets.

So let me do that in a vibrant color.

That's 11,000.

Let me do equity in a different color.

It's all his equity.

Well, I have 250,000 left over.

But I just wanted to make it clear that that's obviously the best way to generate capital for your business is when the business itself generates capital.

Remember liabilities plus equities are equal to assets.