Financial Literacy: How We’re Being Deceived
How your environment shapes your beliefs about money.
Can you answer three simple questions about finance? According to the survey conducted by the Standard & Poor’s Rating Services in 2019, 43% of Americans cannot answer these three simple questions. Are you ready?
1) What is inflation?, 2) What is compound interest?, and 3) What is risk diversification?
Do you know the answers to those questions? Chances are, most of you don’t. Especially if you’re in the age range of 16-30, I wouldn’t even expect you to know much about credit, investments, nor a clue about liabilities.
It’s because of the environment that most of us are raised in that we don’t know these things. Where we are in the world, it’s not considered a priority to educate its people about the importance of knowing how to use money, the value of a dollar, and how to be financial independent.
How can we be the future if we cannot even manage our present? The age of financial illiteracy needs to end here. It is not our parents fault that we do not know these things, however. They only know what has been taught to them.
We are in the age of information, and therefore we have access to things our parents never had. With this being the case, we have more control over our destinies than anyone before us has. Today, I challenge you to learn the definitions of those three terms and the answers to those three questions.
The best way to re-write your story is to read. Read books, articles, talk to people who are financially literate. Go to classes about financial literacy, homeownership, investments, retirement.
Learn all of your options, leave no stone unturned! Lack of education is the largest factor that holds people back from living the lives they were meant to live. Why are things this way? How do we break the cycle? Well, let me paint the picture for you.
Let’s say you grew up in a family who is barely over the poverty line. You go to public school in the inner cities, you never had access to a tutor, and you don’t know one person in your immediate family who has gone to college.
What are the odds that you would know anything about what money is, how to make money efficiently as possible (key word, efficiently), and how to maintain it? The odds are, you don’t. The reason being for this knowledge disparity and therefore, wealth disparity, is because not enough people care to put everyone on a level playing field.
Some people want the world to be this way because it benefits them. Our job is to learn the fundamentals of finance and apply them to our lives. You’re being deceived because your ignorance is the key to others success. It’s time to leave that in the past.
As I mentioned earlier, there are many resources at your disposal. However, make sure to vet them. Anything that promises instant gratification, quick money, and exponential returns should be avoided at all costs.
Also, avoid overworking yourself for money. Work smarter, not harder is the saying you should live by when it comes to money. The hardest, dirtiest work will always need doing, but you will never get paid your value unless you negotiate and set your own rates. The faster we focus on independence financially, the quicker we can achieve it.
The sooner you learn about these things, the better. Nobody wants to struggle their entire lives if they don’t have to! And the truth is, you don’t have to. You can save yourself the headache, simply utilize the information that is available to you and apply it.
This is the generation who will break free from the bondages of confusion and ignorance. We will make a better tomorrow for our children, their children, and many generations afterwards.
What will you do today to change your narrative and re-write the story of your life, correcting the mistakes of the past?