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Financial Education | The 4 Rules Of Being Financially Literate | Practical Wisdom - Interesting Ideas | YouTubeToText
YouTube Transcript: Financial Education | The 4 Rules Of Being Financially Literate
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Financial education is the possession of the set of skills and knowledge that allows an
individual to make informed and effective decisions with all of their financial resources.
It is also called “financial literacy” and it’s extremely important in order for
you to make progress and get ahead in life.
If you’re looking for improvement in your personal and financial life, you might be
looking for financial freedom and financial independence.
It means that you want to reach a point in your life where you no longer have to depend
on family, a job, or a company that you don’t like, for money.
But there is another concept that I’d like you to understand, it is “financial confidence”.
It is different from financial freedom.
This is because freedom is based on the amount of money that you have available, while financial
confidence is based on your confidence and acumen to generate money.
Now here’s the thing: most people think that there is a money scarcity.
They think that there is no money and making more money is impossible.
But this is deeply untrue.
The truth is, the world is littered with money, but only those with the skills and knowledge
can acquire it.
Money is like a game, and it has a bunch of rules that you just have to follow.
Play according to the rules and you will become the master of your financial life, guaranteed.
In this video, I’m going to teach you the 4 most important rules of money which are
the basics of being financially free, financially confident, and financially literate.
These simple rules that I will give you today will elevate your money game and take you
to a whole other level, you’ve never seen before, as long as you’re hungry and dedicated.
I’m going to give you all this information for free, I don’t sell books, webinars,
or online courses.
All the knowledge on this channel is FREE, so if you want to show your appreciation,
click that like button and the subscribe button right now.
It is actually very fascinating how all this information is becoming more and more available
every day, for very cheap or even for free.
And everything is easily accessible with a couple of Google searches.
So, even if everything is at their fingertips, more than 90% of the population is still financially
ignorant.
Let’s me give you a quick example, Peter just got his monthly paycheck.
After tax, he’s left with $1700.
Instead of using this money to invest, save, or anything else that might be useful, he
decides to waste it on a couple of barbecues with friends and many other useless liabilities.
Are you a Peter?
Because there are unfortunately a lot of financially ignorant people today, but the thing is, if
they can change a few bad habits and develop a rich mindset, just about anyone can become
rich.
There are no rich people that are financially ignorant, except of course, for those that
got lucky, for example, stumbling upon a large inheritance or winning the lottery.
However, statistics show that 70 percent of lottery winners end up bankrupt after just
a few years of being extremely rich?
Why is that?
Again, it all comes down to how financially educated one is.
If you have a lot of money, you will still make bad decisions and lose it all, because
you don’t know what to do with it.
So, if you want to become rich long term, and not just for a couple of years, you have
to get financially educated.
Unfortunately, this kind of education is NOT taught in schools, so you need to do it by
yourself.
So, all the information is easily accessible, and this raises the question: why don’t
people learn more about finance?
There are two main reasons why people don’t get the financial education they need despite
it being extremely cheap and, in some cases, completely and totally free.
Reason number 1: Conventional Wisdom Here’s the truth: financial education is
NOT conventionally ok.
Most people will give you a mindset of scarcity, and if your mindset is wrong, you will never
attract money.
For example, growing up, your parents might have been telling you “money doesn’t grow
on trees”, and, “money is the root of all evil”.
These lies that people tell their kids are stopping people from taking the necessary
steps to a better life financially.
Another conventional concept that is widely thought but is extremely wrong is the negative
connotation towards debt.
Debt is not that bad (if you know how to use it), but still, people demonize it because
they don’t have the appropriate education.
So, you have to stop listening to those that aren’t financially literate and financially
confident.
You should start listening to those that actually know how to generate money because they are
the ones that can give you tips on how to become financially educated.
Just like in a sport, for example, Skiing, You don’t want to learn how to ski from
someone that has never skied before, you want to learn from somebody that already knows
how to do it.
Apply this to your financial education, and you’ll learn very fast.
Reason Number 2: Comfort Zone & Self-Esteem In order to generate money, it’s believed
among the rich that, you need to be confident and have decent self-esteem.
Self-image is important, and you have to first of all, believe that you truly deserve to
be wealthier and happier.
If you don’t, you will never become rich.
Think of like a self-fulfilling prophesy, you have to see yourself rich first.
This confident, charismatic, rich image, you see yourself in your mind will give you the
needed confidence to continuously act out of your comfort zone, which is very important.
A very successful person once said: “most people are not successful because they are
afraid of success”.
This is true.
In order to become successful, you have to step out of your comfort zone and take risks.
For example, if you want to start your first business, but you don’t have any money,
you might first of all have to take the risk of getting a loan from your bank, and putting
yourself in thousands of dollars in debt which is out of a lot of peoples comfort zone.
Charisma and confidence are some of the key ingredients you need to become rich.
If you don’t have the confidence to take action, you’ll never become rich.
So, before actually getting into financial education, you have to first work on yourself
and your mind when it comes to risk-taking and failure.
Confidence will give you the strength and the courage to take risks and perform under
pressure.
So, now that you know all about why people don’t get financially educated, and the
importance of it, let’s get started with the 4 most important rules of being financially
educated.
Rule Number 1: Don’t Invest In What You Don’t Understand
Investing is very important especially when you want to multiply your money.
Here’s the thing: you will never, ever, get rich long-term by working for someone
else.
You have to start investing.
There are many types of investments, such as stocks, bonds, real estate, and forex,
just to mention a few, but I want you to know the single most important investment; and
that’s in yourself.
Invest In Yourself Before investing in anything else you have
to invest in the development of your money-making machine: your brain.
Getting the knowledge necessary to operate a business (financial education included)
is not optional.
Your industry and your niche are going to eat you alive unless you are always updated
on what’s going on.
Stay up to date on all information that matters to you and to your success.
Invest In Your Business If you buy or create a business, you will
probably at one point want to expand it.
If you want to do so, you need to put some money into your business in order for it to
grow.
It’s like a car: in order to make it run, you have to put gas in it.
And a business is no different, in order to keep growing, it needs to be fed money.
Investing in your business might be anything from marketing to research or developing a
new product.
Invest In Real Estate Real estate investing, like other investments,
are basically “buy low and sell high”.
A simple concept with very complicated steps.
Most real estate investors start with regular homes, then they move to commercial real estate,
hotels, big commercial centers, offices, and more.
Basically, you find units (structures) with potential that have been mistreated, you fix
them up, you wait for the price to rise and then you sell that unit in order to make a
profit.
Invest In Stocks Stocks (or shares) are literally a part of
a company that is for sale to the public.
When buying stocks, you have the right to a part of the profits of that business, which
is the equivalent of your initial investment.
Just like any other investment, the stock market is pretty risky, and there are a lot
of people that lose a lot of money with it.
So, these 4 are the most important and well-known types of investments.
However, independently of the type of investment that you choose, you have to know what you’re
getting into.
There are rules to follow but equally there’s a lot of misleading information out there.
A lot people are willing to scam you just to take your money.
So you have to be very - very careful who you listen to, do heavy research before putting
your money in something new, or seek advice from a professional in that industry, preferably
someone with skin in the game.
Remember this rule: NEVER invest in something that you do not understand.
Rule Number 2: Debt Is A Powerful But Deadly Weapon
This one might be controversial, but the power of debt is underrated.
All those that know how to use it will thrive, while those that are scared of it will miss
a lot of opportunities.
There is good and bad debt.
Bad debt is anything that you know that you won’t be able to pay off, for example, student
loans.
This is extremely painful and it destroys the financial life of many people.
We shouldn’t ask 18-year-olds to make financial decisions of hundreds or thousands of dollars,
without considering the consequences, so be careful with that one and only get in debt
if you know what you’re doing.
On the other hand, good debt is the type of debt that you’re absolutely sure you’ll
pay off (or you have a plan to pay it off), and it will also make you money.
Getting in debt is a tool that you can use to get rich.
For example, you might want to get a loan in order to start your business.
If it all goes as planned, you will pay off your debt and will be free to expand your
business as long as you’re always paying off your dues.
Rule Number 3: Think Rich Thinking rich is seeing yourself rich and
acting rich.
Essentially you’re playing the of a rich person, and this might include living above
your means.
Living below your means is a defensive concept invented by financial gurus that to the most
part is solid wisdom, I mean we shouldn’t live way beyond what we can afford, because
this is how most people end up in serious financial trouble.
As long as you are disciplined and wise about what you’re doing with your money, you have
to also spend your money on things that give you confidence, and make you feel good.
Do you really think that depriving yourself of a couple of coffees at Starbucks will make
you a millionaire?
Instead of living below your means and saving a penny here and a penny there, start gaining
new skills that will make you money in order to support your desired lifestyle.
This single trick will have a HUGE impact on your mindset, you’ll start seeing opportunities
and places where you can make money.
Rule Number 4: Develop Skills To Acquire Assets Assets are things that put money in your pocket,
while liabilities are things that take money out of your pocket.
Your brain is your biggest asset, and you can develop it in order to be even more valuable.
There are skills that are very demanded in the marketplace, and they all have two things
in common: 1.
They bring a lot of value to the market.
2.
They make you a lot of money.
So, instead of working for someone else, start developing skills that will help you generate
income from nothing, just by delivering results to the market.
Figure out what best fits your abilities, and develop your first high-income skills
in order to gain the resources necessary to acquire more and more assets.
Well, that’s it for today’s video, I hope you enjoyed it and gained value from it, if
you did give it a big thumbs up.
Also, Leave your thoughts down below, I’d love to hear them.
With that said, don’t forget to subscribe and enable notifications.
Thanks for watching and I’ll see you in the next one.
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