How to Use Debt to Build Your Amazon FBA Business

I'm going to cover everything from financial management to your money blueprint to what is debt, what is credit, what is cash, what is money, and really dig down deeper into the steps to take to build your business from nothing. 

Money Blueprint 

If I were to ask what money is to you, how do you end up answering that money is bad or money is good? Money is the root of all evil or money allows you to what does money allow you to do? Money allows you to take advantage of people or money allows you to sell and support people. It's these fundamental beliefs that make such a difference.

How do you end up turning debt into something that you can actually build? it's really first of all knowing your money blueprint and then understanding what is money, what actually is it? 

What Is Money and Credit Really?

When you first start, you may have a credit card. You will most likely have a bank card, a current account. And I think it's really important to understand what this actually is.

So credit, credit is simply capital. It's money that you don't have, but what is it that credit actually is? Credit is the banks, the credit providers, they're basically saying to you, you've got the power, and we are allowing you to spend this money, your spending power. If you think of like Amex or American Express, you can go into how much money you want to take out, or what your spending power is.

You can put in £5000, £20,000, £100,000, and Amex will say to you, okay or not okay. What they're basically saying is we are approving you to spend this nonexistent money, and as soon as you spend it, it becomes debt to you. It's a contract between you and the credit provider which is basically saying, if you choose to spend this money, that's not yours, that is, it doesn't exist, it's nothing to do with you, you've just got an approval to say, here's your credit availability of £5000 and there you go, you can now spend that. But as soon as you spend it, it now becomes debt to you. That is essentially what credit is -it's just somebody saying to you, you don't have this, I'm going to make it available to you, but as soon as you spend it, this is now liable to you and you're basically promising that you're going to pay this back. If you don't pay it back, they are going to put you interest onto that.

If you do pay it back, then that is great, we're all happy. So therefore, now we understand what is credit and it's just somebody saying, "I'm going to allow you, based on everything that I know about you to spend £1000 with the contract in place between me and you to say if you do spend that it becomes debt on to you that you have to repay me. If you don't, I'm going to put interest on to you."

What Is An Asset Or A Liability?

So that's when we start talking about what is an asset, what is a liability? Now this became really, really well known from a great book called Rich Dad Poor Dad. I'd highly recommend if you haven't checked it out, please do check it out on audio or get the book. It talks about Robert Kiyazaki who's the author. He basically his experiences of a rich dad and a poor dad. The poor dad is somebody who is well educated, but someone who doesn't have a lot of money, and his rich dad is somebody who understood the difference between an asset and a liability, and he started to talk about different materialistic things, which you could purchase, and whether it is an asset to you or a liability.  

Knowing the difference between an asset and a liability is the fundamental to build your business from debt. An asset is something which is going to generate some income, either immediately or into the future. That asset could continue to pay you for months and months to come, and it can continue to grow, whereas a liability is something that is taking capital and money away from you.

How to Use Debt to Build Your Business

How does debt come into this? If you have got debt on a card, a loan, or whatever the case may be, that is going to be taking money away from you. It is giving you money, but as soon as you spend it, it becomes debt and a liability that you have to pay back.

So, therefore, the obvious answer to that is, everything that you spend on debt, has to, in some way, generate some income. Any money that you spend, has got to be an asset that is either going to pay you money immediately, or very quickly into the future. This could happen in multiple ways. 

If you were to invest in a new team member, then the new member of staff is going to be a liability. You are going to have to pay for that member of staff. However, if that member of staff allows you to save time, grow the business, allows you to educate, then another team member and member of staff to your team would be an incredible asset. 

Further reading:

5 Reasons Why An Online Arbitrage Business Is Possible Long Term

7 Things Successful Amazon Sellers Do

How to 10x Your Business With Virtual Assistants