In the real world how many of you utilizing the knowledge that learned in your school? Most of you don’t, including me. But the most important practical education that no school is teaching is about basic Financial Literacy.
WHY PEOPLE STRUGGLE WITH FINANCIAL PROBLEMS?
The education which school or college teaches can get you a good job with a handsome salary. But still many people get stuck in debt and struggle with financial problems in their entire life due to the lack of financial literacy.
The book “Rich Dad Poor Dad” tells about the mindset of rich and poor people and also explains how rich get richer and the poor get poorer. This is the best book which explains about Rich and Poor mentality. If you haven’t read it yet here is the link RICH DAD POOR DAD
RICH AND POOR MINDSET
All the people in this world are the same. But the way their brains think is different and that is what matters. Rich mindset will be programmed since childhood or they tuned it at some point of time in such a way that they make money work for them. They use their time for learning new things and building assets. But poor and middle-class work for money and their paycheck depends on how many hours they worked. “Working hard for money is an old formula, born in the day of cavemen”. This sentence is taken from Rich Dad Poor Dad and is one of my favourite lines.
RIch build assets and poor build liabilities. To know how assets and liabilities affect your life click on this link https://www.mintpaisa.com/assets-and-liabilities-how-these-affects-your-life/ The main important term which rich understand and apply in their life is “CASHFLOW”. What is this? Cash flow is nothing but the total amount of cash coming and going out of your pockets. Only a few manage this and build positive cash flows. The one who builds negative cash flows will struggle their entire life in the debt cycle.
HOW TO BUILD FINANCIAL KNOWLEDGE?
- Read newspapers and magazines related to business.
- Try to understand the financial terms in those newspapers if you cannot just google it out.
- Concentrate on your cash flows.
- Do not just give your money to mutual funds, try to invest by yourself.
- In this process of investing you can’t just blindly go and dump your hard earned money in some XYZ company.
- The first question that arises in you obviously will be “ In which company I should invest?” For that, you have to analyze the companies.
- To do that one has to give his time to learn “Fundamental Analysis” so that you can understand how to read balance sheets, profit & loss, cash flow statements. This is might sound like a complicated but it is not. Just give some your time to learn it and after that, you will realize how it can help you with your financial life.
- Build assets, not liabilities
- Develop positive cash flows not negative
- Improve financial aptitude
- Invest in yourself by learning new things
- Switch to business newspapers
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