The Utility of Liabilities

We talked yesterday about the fact that financial assets and liabilities are simply tools.  And that its a misinterpretation of scripture to think that borrowing is evil.

Use liabilities to open the door to cash flow
Any financial tool can be used to open the door to cash flow

On the other hand, if you do not repay your debts at the terms that you agreed to, you break the teaching that Paul’s teaching below, and enter a “debt” situation.

“Render to all what is due them: tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor.” (Romans 13:7)

Again, a liability is simply a tool.  It can be a good tool or a bad tool depending upon how it’s used and who is using it.

It might be a great idea for one person to use liabilities and a horrible idea for another based upon the human life value of that person.  Who are they that makes them capable of using this tool for good?

This is important:  great wealth is always built utilizing liabilities as a tool of production.  These are almost always actual cash liabilities, although I’m sure there are examples of slow growing companies that have been successful without ever utilizing “other people’s money.”  But they would have had to use “other people’s labor” in order to build that wealth, and in so doing they entered a liability situation.  This is not a problem because they were creating more assets through their relationship, and this is exactly how God made man to live together.  So liabilities, just as assets, are simply a tool.  Nothing more, nothing less.

Wayne Grudem spends a whole chapter in his book, “Business for the glory of God” explaining in much greater detail how borrowing and lending can be a useful tool unto the glory of God in our work.

I recommend you read that book.  Why don’t you recommend this blog to someone who might find it interesting?

Photo credit: Fede

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