How to Build Wealth the Smart Way to Manage Income Assets and Debt

Master Your Money: Build Assets, Cut Liabilities

Have you ever heard that you go to the bank to take a loan, and the bank manager tells you — bring your degree, and we’ll give you a loan?

If you’ve done B.Tech, then we’ll give you a loan of 1 crore.

You’ll say — what are you talking about? Do you get loans based on a degree?

Then why is our society so crazy about degrees?

Look around you — people are only running after degree certificates.

If we get a degree, we’ll become successful in life — that’s what everyone believes.

But actually, when you need money — for a house, a car, for business, or to expand your business — you won’t get any loan on the basis of your degree.

You’ll see, those who are less educated than you — they get more loans and earn more money.Why does this happen?

Because we’re always shown the value of degrees, but we’re never shown the importance of building a financial statement.

Because the teachers who are teaching in schools — their own salaries are very low.

And these days, I’m surprised to see that entrepreneurship is now a topic in schools and colleges.

But who’s teaching entrepreneurship?

The person who has been working in the same school for the last 15 years.

Sorry to say, but the truth is — entrepreneurship is understood by an entrepreneur.

Finance should be taught by someone whose own finances are strong.

For example, if a doctor performs a surgery — it makes sense.

But if a mechanic does a surgery — it doesn’t make sense.

It’s exactly the same.

Academics is understood by someone who teaches mathematics.

But entrepreneurship is not understood.

Similarly, someone whose own finances are not in place — who is doing a 50,000-rupees job in a school — obviously, he is not doing very well in life.

If he wants to do well, he has to do something else. Or he has to do something else alongside this.

And if he does really well, maybe he wouldn’t be doing a job for 50,000 rupees.

Here, I’m talking about you.

It’s not about whether the work is small or big — being a teacher is a very noble profession.

But the point is — he also has a lot of liabilities.

He too has to run a household, he has expenses.

If it’s a teacher from Stanford or Oxford, then he is not earning just 50,000 rupees.

He already has a lot of money.

But the point here is — if you expect underpaid people to provide extraordinary education to our future generation, then that’s not possible.

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The real issue is — we are never taught how to build our own financial statements.

Based on which a bank manager will be ready to give you a loan immediately.

If it’s good, then fine. But what are the things included in a financial statement?

Look, I’m telling you very simply. We’re not learning any accounting here. We’re talking directly — how your life will grow.

Let me give you an example. Before we talk about the financial statement, we were saying — at some point in life, you may need a loan.

You will see that all the big people — like Ratan Tata or Mukesh Ambani — have taken loans in the name of their company.

They are growing by taking loans.

So if loans are being taken — then on what basis are these loans being given?

And the second point —

In your life too, a time may come when you’ll need a loan. Yes, home loans are one thing, that’s fine. Car loan — that’s understandable.

But you might want to take a loan for business.Suppose there’s a business where you can earn a 30% profit annually.

If you have 1 crore rupees, you’ll earn 30 lakhs profit.

But if you have 10 crore rupees, then the profit percentage remains the same — 30% — but your profit becomes 3 crores.

Now, even if this money comes via a loan, and there’s some interest involved,

We will still give that interest.

Even then, we’ll be left with several crores in profit.

So understand this — if you ever need leverage in life, then how will you get it?

Today we’re talking about increasing your financial IQ.

Nowadays there are many intelligent people — but Warren Buffett says:

“If your IQ score is really high, then donate a bit of it. Because if you want to make money from the stock market, you don’t need an extraordinary IQ.”

Similarly, when we talk about financial IQ, even that doesn’t require anything extraordinary.

There are just basic things you need to understand.

Now let’s talk about the financial statement. Then we’ll discuss how you’ll increase your financial IQ.

So when we talk about a financial statement, understand this — there are four things in it:

1. Your income — the money you’re earning

2. Your assets

3. Your expenses

4. Your liabilities

Now let me tell you something simple —

When you subtract expenses from income, whatever is left — that is your profit.

And when you subtract liabilities from assets — what remains is your net worth.

We say — someone has a net worth of 100 crores.

Because they may have 100 crores in assets, and very little liabilities — that’s how their actual worth is calculated.

If someone is earning very good profit, that’s also a great thing.

But these four things — income, assets, expenses, and liabilities —

If you start understanding them, they can take you very far in life.

Sadly, most people don’t pay attention to these things.

We are living a careless life.

Do you know what carelessness means?

Whatever is going on is fine… whatever is happening, let it happen — that kind of mindset.

So if you want to understand these four things — let’s break them down:

1. Assets are the things that bring money into your pocket.
2. Liabilities are the things that take money out of your pocket.

We’ve already understood this in our series — that we need to build assets.

Things that bring income into our pockets.

And we need to reduce liabilities — the things that take money out.

We need to increase our income and decrease our expenses.

This is a very simple thing. It's so simple, yet when I talk about financial IQ —

In developed countries, out of every 10 people, only 4 know these four things in detail (income, assets, liabilities, expenses), and 6 don’t know.

In developing countries like India, 8 out of 10 people don’t know these four basic financial principles.

Today, if you're listening to this on my channel, it may sound common to you.

But if you ask someone around you — “What is net worth?”, “What are assets?”, “What are liabilities?” —

They don’t even know. They are simply living a life of negligence.

They don’t know the details. If they don’t know the names, at least try to understand the concepts.

Now the question is — how will you increase your income? How will you build assets?

Of course, this won’t happen in one day.

But your focus should be here —

That I must build assets, I must build multiple sources of income.

Now, to increase your financial IQ, you first need to work on three things:

First — you need to learn budgeting.

It shouldn't be like you just went out shopping and bought a pair of shoes for ₹10,000.

It’s possible that the person buying those shoes earns ₹25,000 or ₹30,000 per month.

Today, they may have money — they saved up four months of salary and now have ₹1 lakh in the account.

They think, “I’ve got ₹1 lakh, so I can easily buy ₹10,000 shoes.”

But spending ₹10,000 is a big deal in this case.

And here’s where you need to understand the rule.

Budgeting has a very simple rule — the 50-30-20 rule.

That means out of your 100% income, you divide it into 50%, 30%, and 20% segments.

Let’s say someone earns ₹25,000 or ₹50,000 a month.

They can use this formula to manage their expenses.

But this rule is valid only until your income is below ₹4 lakh per year.

Above ₹4 lakh, things change — emotions change, lifestyle changes, spending habits evolve.

If you're earning more than ₹4 lakh per year, then you’ll also be able to save more.

According to this rule — 50% of your income should go towards your basic needs.

Like food, water, school fees, house rent, etc.

30% of your income can go towards your desires —

like buying new shoes, watching movies, eating out.

For example, if someone earns ₹25,000 —

then 10% of that is ₹2,500, and 30% is ₹7,500.

That means ₹7,500 is the maximum they can spend on non-essential items in a month.

Now, if a shoe costs ₹10,000 and your budget limit is ₹7,500 —

then you simply can’t afford those shoes.

And even if you do buy them, you won’t be able to spend on any of your other desires that month.

If your income is more than ₹25,000, then the allocation changes according to this formula.

But one thing must always be done — you must save at least 20% of your income.

If you're not saving, you're putting your family in danger.

You're putting your financial future at risk.

Because you're earning, but you're wasting it.

I was watching a video on the internet —

and in that video, it was said:

"The way we earn..."

Many people who have never even used a spreadsheet or knew anything about AI are now learning automation. Because AI automation doesn't mean replacing people — it means freeing them from tasks that just consume time but don’t deliver real results. It allows people to focus on what truly matters — like doing creative work, thinking about actual outcomes, or identifying which efforts can create real impact. Any task that simply processes information or moves things forward can now be done by a computer.

So let’s understand how to get started:

First step: Create a plan of action. Ask ChatGPT: “If I want to start an AI automation agency, what are the top 10 steps I should take? Be detailed, but concise.” ChatGPT will give you step-by-step guidance.

Second step: Master one specific automation use case. Most people, when starting out with AI, try to do everything all at once — but this prevents them from going deep on any one thing. I recommend choosing one area and focusing deeply on it. For example: cold outreach, team training, bot building, or onboarding automation — pick one, and become an expert in that. Because specialists always get paid more.

Third step: Join a community. Surround yourself with people who are already doing what you want to do — it will help you learn much faster. If you're more technically inclined, join Dave Eelar’s community where they build full AI systems. If you're interested in content and automation, follow Stephen Pope and join his group.

I understand that this isn't like the usual "audit to deal" process because you're not working with external client projects — you're helping with internal workflows. But you can approach this differently. Just reach out to potential clients and say, “Hey, I’m new, and I’m building some case studies. I’ll solve a problem for you for free — no cost at all. All I ask is that if I overdeliver on what I promised, you let me use the project as a case study to show future clients.” This creates a win-win — they get their problem solved for free, and you get proof of work and testimonials. Do this for 5–10 clients, and trust me — if you're good, they’ll want to keep you and refer you to others.

And if you're someone who’s actually building real AI technology — actual products and software, not just automation — and you want to see if I might be interested in partnering with you, then just find me on Instagram and send me the word “venture.” We’ll have a chat and see if what you're building makes sense.

You are earning money, making profits — and that depends on your business. But the bank will look at whether your profits are increasing year by year. How are you generating those profits? Are your sales running smoothly? These are the things they observe. You need to understand and build these elements and pay close attention to them. I don't care about degrees — my financial statement should be strong. Someone should be able to look at it and say, "This person is solid."

Next comes the topic of expenses, which are recorded in the books. Expenses aren't wrong. Your business will have expenses. But it's important to note in which direction those expenses are increasing. If your expenses are helping your business grow, then it's a very good sign. Similarly, your assets — are they increasing over time or decreasing? This too will show up in your financial statement. If you own a house, real estate, or machinery, these will go into the assets section. So what things do you own that can be considered your assets?

Assets should be the kind that generate income. For example, you may include a car under assets, but as Robert Kiyosaki says — it can be a liability because it takes money out of your pocket. The main idea is to build assets in life that bring real income. Finally, we come to liabilities — meaning, what debts do you owe to others? If you’ve taken a loan, that will be listed under liabilities. So liabilities should be kept low. While we understand this, there are some liabilities that can even be turned into assets.

We had previously made a video showing how you can turn your liabilities into assets. If you haven’t watched that yet, you can click on the link in the top-right corner to check it out. But the main point remains — reduce liabilities, increase assets, and then focus on budgeting, investing, and debt management.

I hope this short blog has helped you learn some valuable lessons that will help improve your financial IQ. And while most people ignore these things, I personally believe that you won’t make the same mistake.

If you have any questions, feel free to drop them in the comments. In fact, if you have your own ideas — like how one can improve their financial IQ — do share them in the comments as well.