Financial education refers to the set of skills and knowledge that enables a person to make informed and effective financial decisions with all of their assets.
It’s also referred to as “financial literacy,” and it’s critical if you want to advance and succeed in life.
It means you want to get to a point in your life where you don’t have to rely on family, a job, or a company you dislike for financial support.
However, there is another concept I’d like you to grasp: “financial confidence.” It’s not the same as financial independence.
This is because financial confidence is based on your confidence and ability to generate money, whereas freedom is based on the amount of money you have available.
Here’s the thing: most people believe there is a scarcity of money.
They believe that money does not exist and that making more money is impossible.
However, this is completely false.
The truth is that money abounds in the world, but only those with the necessary skills and knowledge can obtain it.
Money is similar to a game in that it has a set of rules that must be followed.
Play by the rules and you will, without a doubt, become the master of your financial life.
As long as you’re hungry and dedicated, these simple rules I’ll give you today will elevate your money game and take you to a whole new level you’ve never seen before.
I’m not selling books, webinars, or online courses, so I’m going to give you all of this information for free.
Let me give you an example: Peter recently received his monthly paycheck.
He’s left with $1700 after taxes.
Instead of investing, saving, or doing anything else with this money, he decides to spend it on a couple of barbecues with friends and a slew of other frivolous expenses.
Do you think you’re a Peter?
Because there are a lot of financially illiterate people today, but the truth is that anyone can become wealthy if they can change a few bad habits and develop a rich mindset.
Except for those who got lucky, such as inheriting a large sum of money or winning the lottery, there are no wealthy people who are financially illiterate. However, according to statistics, 70% of lottery winners go bankrupt after only a few years of being extremely wealthy?
What is the reason for this?
It all boils down to one’s level of financial education.
Even if you have a lot of money, you will make poor decisions and lose it all because you have no idea what to do with it.
So, if you want to become wealthy in the long run, not just for a few years, you must become financially educated.
Because this type of education is not taught in schools, you will have to teach yourself.
So, now that all of the information is readily available, why aren’t more people learning about finance?
There are two primary reasons why people do not receive the financial education they require, despite the fact that it is extremely inexpensive and, in some cases, completely free.
The first reason is conventional wisdom.
Here’s the truth: traditional financial education isn’t a good idea.
The majority of people will instil in you a scarcity mindset, and if your mindset is incorrect, you will never attract money.
For example, your parents may have told you as a child that “money doesn’t grow on trees” and that “money is the root of all evil.”
People are being discouraged from taking the necessary steps toward a better financial future because of the lies they tell their children.
Another widely held belief that is completely incorrect is the negative connotation associated with debt.
Debt isn’t all bad (if you know how to manage it), but people still demonise it because they lack the necessary education.
As a result, you must stop listening to people who aren’t financially literate or confident. You should start paying attention to those who actually know how to make money because they are the ones who can teach you how to become financially literate. You don’t want to learn how to ski from someone who has never skied before, just like you don’t want to learn how to ski from someone who has never skied before.
You’ll learn a lot faster if you apply this to your financial education.
Reason 2: Self-Esteem and Comfort Zone
The wealthy believe that in order to make money, you must be confident and have a healthy sense of self-esteem.
Self-esteem is crucial, and you must first believe that you are deserving of greater wealth and happiness.
You will never be wealthy if you do not. Consider it like a self-fulfilling prophecy: you must first see yourself as wealthy.
This confident, charismatic, and rich mental image of yourself will give you the necessary confidence to act outside of your comfort zone on a regular basis, which is critical.
“Most people are not successful because they are afraid of success,” a successful person once said.
This is correct.
You must step outside of your comfort zone and take risks in order to be successful.
For example, if you want to start your first business but don’t have any cash, you may have to first take the risk of taking out a loan from your bank and incurring thousands of dollars in debt, which is out of many people’s comfort zone.
Some of the key ingredients you’ll need to become wealthy are charisma and confidence.
You’ll never be wealthy if you don’t have the confidence to take action.
So, before you dive into financial education, you need to work on yourself and your mindset when it comes to taking risks and failing.
You’ll have the strength and courage to take risks and perform under pressure if you have confidence.
So, now that you know why people don’t get financial education and why it’s important, let’s get started with the four most important financial education rules.
Rule #1. Don’t Invest In Something You Don’t Understand.
Investing is critical, especially if you want to grow your money.
Here’s the thing: working for someone else will never, ever make you wealthy in the long run.
You must begin investing right away.
There are numerous types of investments available, including stocks, bonds, real estate, and forex, to name a few, but I want you to be aware of the single most important investment: your own self.
Make an investment in yourself. You must first invest in the development of your money-making machine: your brain, before you can invest in anything else.
Obtaining the knowledge required to run a business (including financial education) is not an option.
Unless you keep up with what’s going on in your industry and niche, you’ll be eaten alive.
Keep up to date on everything that affects you and your success.
Invest in your company If you buy or start a business, you will almost certainly want to expand it at some point.
You must invest money in your business in order for it to grow if you want it to succeed. It’s like driving a car: you have to put gas in it to make it go.
A business is no different; it needs to be fed money in order to continue to grow. Marketing, research, or the development of a new product are all examples of investments in your business.
Real Estate Investing Investing in real estate, like other types of investments, is based on the principle of “buy low, sell high.” A simple concept with a lot of moving parts.
Most real estate investors begin with residential properties before moving on to commercial properties such as hotels, shopping malls, offices, and more.
Basically, you look for potential units (structures) that have been neglected, fix them up, wait for the price to rise, and then sell the unit to make a profit.
Stocks to Invest In Stocks (or shares) are essentially a piece of a company that is available for purchase by the general public.
When you buy stocks, you gain the right to a portion of the company’s profits, which is the same as your initial investment.
The stock market, like any other investment, is extremely risky, and many people have lost a significant amount of money in it. These four types of investments are the most important and well-known.
Regardless of the type of investment you make, you must understand what you’re getting into.
There are rules to follow, but there is also a lot of false information available. Many people are willing to defraud you simply to get your money.
So be very careful who you listen to, do extensive research before investing in something new, or seek advice from an industry professional, preferably someone with skin in the game.
Always remember to never invest in something you don’t understand.
Rule #3. Debt Is A Deadly Weapon.
Debt’s power is underappreciated, which may be controversial. Those who understand how to use it will prosper, while those who are afraid of it will miss out on many opportunities.
There are two types of debt: good and bad.
Student loans, for example, are an example of bad debt that you know you won’t be able to repay.
This is excruciatingly painful, and it destroys many people’s financial lives.
We shouldn’t expect 18-year-olds to make financial decisions worth hundreds or thousands of dollars without thinking about the consequences, so tread carefully and only get into debt if you’re sure you’re doing it right.
Good debt, on the other hand, is debt that you’re confident you’ll pay off (or that you have a plan to pay off), as well as debt that will earn you money. Getting into debt is a tool you can use to become wealthy. For example, you might need a loan to get your business off the ground.
If everything goes according to plan, you’ll be able to pay off your debt and expand your business as long as you keep up with your payments.
Rule #3: Visualize yourself as a millionaire.
Thinking rich entails seeing yourself as wealthy and acting accordingly.
In essence, you’re taking on the role of a wealthy individual, which may include living beyond your means. Living below your means is a financial guru-invented defensive concept that, for the most part, is sound advice. I mean, we shouldn’t live beyond our means because that is how most people end up in serious financial trouble. You must spend your money on things that give you confidence and make you feel good as long as you are disciplined and wise with your money.
Do you really believe that skipping a couple of Starbucks coffees will make you a millionaire?
Rather than living on a shoestring budget and saving a few pennies here and there, start learning new skills that will help you earn money and support your desired lifestyle.
This one trick will have a huge impact on your mindset, and you’ll begin to see opportunities and places where you can make money.
Rule #4: Develop Asset-Acquisition Skills
Liabilities are things that take money out of your pocket, while assets are things that put money in your pocket.
Your brain is your most valuable asset, and you can improve it to make it even more valuable. There are certain skills that are in high demand in the marketplace, and they all share two characteristics:
1. They add significant value to the market.
2. They bring in a lot of money for you.
So, rather than working for someone else, start honing skills that will enable you to make money from nothing by simply delivering results to the market.
Determine what best suits your abilities and develop your first high-income skills to gain the resources needed to accumulate more and more assets.