What Are Fixed Assets On A Balance Sheet

What are fixed assets on a balance sheet? This is a really important conversation, especially for those of you that are gaining net worth and strategy. So there are assets and there are liabilities. So in a balance sheet, you have assets, which is what you own, liabilities, what you owe, which equals your net worth. So in Millionaire Maker, I'm making net worth millionaires. Assets minus liabilities is your net worth. Inside the subset of the asset class are fixed assets. And you really need to know the difference. Why? I'll how they're taxed. We have an amazing team. At the end of our conversation, I'm going to give you an opportunity to fill out an application to work with our team. But here's what we're going to talk about today. There's four specific things I want you to note. What is an asset and what types of assets are there? What is a liability and what kind of liabilities are there? And then note together creates a balance sheet. Assets minus liabilities equal your net worth. So when I say make millionaires just to get started, I make net worth millionaires. There are people all over the Internet. I call that the bathroom wall because people can say anything about anyone and every exaggeration. There are people who say they make millionaires and they'll help your company get to a million. But, you know, let me tell you, if your company, which is an asset, gross is a million and you spend nine hundred thousand, you're only worth one hundred thousand in my calculations, which you're right. So we're going for net worth millionaires, not million dollar companies. You're going might have one of those. You might have an eight figure company, might have a nine figure company along the way. I want your net worth, your personal family legacy network to be a million or more. I need three to five years to do it. So let's talk about this thing called the balance sheet. I never learned about it. I grew up on a farm in Nebraska. No one told me one thing that there was an asset or liability. I didn't know all that equipment all over the farm were assets of the farm. So to be specific and extremely accurate, I actually had it all written out. Right. So I'm going to actually read some of this stuff to you like an asset, a business asset or all the items of value that you purchased in a transaction. So that includes like if you bought an asset in real estate and it came furnished, everything inside of that would be included in the asset and the way you book it on your balance sheet inside your QuickBooks, because all of this needs to be booked right. And a little hint, just a little word of caution off to the side here. Bookkeepers a lot of times are P&L bookkeepers, meaning they can book income and expenses. They don't know how to book assets. And I can tell you, those of you who are starting to acquire assets, whether it's real estate or gas and oil or a business, there's all sorts of booking into a proper accounting system that are going to be required to make sure they're not just income and expense bookkeepers when you're getting this stuff booked. Now, the types of assets, short term assets and long term assets, and they're fixed. Right. So short term assets are cash, inventory, accounts receivable, any of your collections, prepaid expenses. A lot of times you'll prepay expenses for the year before. Right. So like mail, like I don't know how many times when we used to ship a ton of stuff, we would prepay shipping because we want the deduction in that tax year end. So there's a lot of strategy to what I'm talking about. And if you don't have a good team, it's what I put together for you. Integrated Wealth Systems is a team. We have the team and we have the systems to make you millionaires and help your businesses run and really help them run. Now, inside of long term assets, those are things like property, your plant, the building, equipment, notes receivable. Right. So those are the long term assets. So fixed assets typically are in your long term position. Right. They're your building, they're your plant, they're your equipment. You want to dissect that a little bit. And again, this is where you really want a tax team, not a bookkeeping team to really determine like a depreciation schedule. Well, can you appreciate some of the building when I owned an aircraft? Right. Big asset. Three million dollar aircraft. It had a very specific five year depreciation schedule and you wanted to book everything inside of the plane differently. So I had several entities own one asset, one big asset. So again, this is a lot of tax counsel. This isn't stuff you're just going to look up here on YouTube and here out on the Internet. You really want an expert. I have phenomenal experts. Please, please. At the end of our conversation, I'm going to give you an application to apply to work with them. They only work with the serious, not just casual, you know, maybe kind of sort of people. Here's what I would say. Our teams work with the committed, not the interested. So are you committed? We're committed. Now, let's go to the liability side of this conversation. Liabilities. They're the claims on asset. Right. So, for example, in simple terms, a piece of real estate, right, your real estate, the assets, the mortgage against it's going to be the liability because you owe on that. So assets are what you own. The liability is what you owe. Right. It's direct claim on an asset, such as a bank loan, again, in a mortgage situation. And a lot of times it was interesting about many people who actually do hard money loans. They actually record their liabilities. They don't go to the courthouse. They don't record that debt, which really then makes it more of a personal guarantee between two people. So you really want to have recorded liability at the courthouse or with the financial institute, not just casual between two people. And just because it's on your balance sheet doesn't mean you're going to win in court. You're going to have to have liabilities recorded. So examples of liabilities. Right. Obviously, their mortgages, it's debt against the property. Liabilities can also just come in the form of a tenant. I'm going to say people, people can become liabilities inside the asset that you own. So a lot of times, especially like high employee or high transactional companies, they'll put the liability, meaning the interaction of people. Like I'll give you an exact example. I have a client who has a lot of employees and has a lot of equipment, right? It is in the construction, the real estate space, three entities do all of that. One entity owns the core asset of the real estate. The next entity owns the liability called the equipment. Now inside that company, you could say the equipment is asset, but really to the entire umbrella of the company, that equipment, if it hurts somebody is a huge liability. So you isolate the liability inside one LLC and then people, it's a staffing agency. So again, in the umbrella of it all, people could sue for that highest asset. So you have three companies and you divide assets and liabilities. Now, for those of you that are higher net worth, you're going to start understanding a lot of this. I have companies that I coach and mentor, construction, real estate, equipment companies, employee companies. They may have seven to nine companies running one umbrella organization to divide up where the assets are and where the liabilities are. So that's an example. You have real estate, equipment and employees, three different entities and three different divisions, the entire umbrella of assets and liabilities. It's just protected and it's also protected from tax strategies. So there's a lot of advanced conversation in this. For those of you just to get started, chapter 10 of my Millionaire Maker book, I call it walk the beans, right? Because it's the basics, right? So when I grew up in Nebraska, by the way, if you didn't know that, before they had equipment, way back in the day, yes, we used to walk the beans, meaning you walk rows of beans with a little knife and you'd have to cut out all the weeds. It was a very exciting summer job, extremely lucrative, but really boring. You get a great tan. That was about all it was good about it. My point is walk the beans is basics and it's back to that baseline of do you know where you are? Do you have the right team? Do you have the right systems so you can manage your assets and liabilities? So if anything ever happens, you're protected. And those of you who have intellectual property, that needs to be completely, that is an asset that is golden. Your database is an asset that's golden. Those should be in its own company. And if you ask my tax team, because I've been doing this for 20 years, so it's not advice, but it's what most of my authors and publishers and folks that are doing a lot of content inside of a C Corp in Nevada, in our office is where we house that that company and give you a lease, protect your database, protect your URLs and protect your intellectual property. It does business with your operating company. So there's a lot of strategy to this and there's a lot of reasons you want to know what your assets are, know your liabilities, and not just from what QuickBooks and Quicken says. It's from the behavior of the organization and what it's designed to do. So our teams will help you do that. For us to get started, I need two things. I need you to subscribe to this channel because if you thought this was big content, wait till we really roll up our sleeves, right? So I want you to subscribe, click the notification button and share this with your friends, share it with your family. A lot of people need to be in this conversation. I don't know how many people say, how come people don't know about you? Well, you know, the big financial firms have billion dollar budgets, multimillion dollar budgets. Good old me. I'm just here to help you get financially literate. So I need you to share the knowledge, subscribe and share, please. And the first thing I want you to do is go into the notes. I want you to take personality quiz. It's called the financial personality quiz. Tells me who you are. And then from there, we're going to go into an application. And if you are really serious, committed, not interested, I'll get you in touch with our tax team and our corporate structure team. So we can help you decide what is the best structure for you and your business. I'll give you one last example. I have a brand new chiropractic team, big team, making a lot of money. They are going from one company to seven companies in one conversation with us, just how their taxes are, how their structure is. Again, if you're putting your hands on another person in chiropractic, that's a huge liability. And then if you're going to sell supplements, another liability. So you need to be spread out. You need to do it right. You need the pros, not those legal zooms or those dot coms that can do it cheap and free because this is your life. This is your legacy. So do it right. So again, click on the link, take the quiz, do the application. Make sure you're here tomorrow because we have way more content coming.