Addressing Financial Illiteracy
After we earn or acquire money in some other way
, three primary choices then exist regarding what can be done with it.
We may
A) Spend it (debt centric, negative return), typically directing it towards:
1. Expenses (food, clothes, transportation, etc.)
2. Liabilities (credit cards, mortgage, other loans)
3. Stuff (typically tangible items that depreciate rapidly in value)
B) Save it (asset based, low but positive return)
C) Invest it (income producing assets, greatest return); real estate, stocks, bonds, etc.
While B & C are the only choices of the three which can help deliver financial security and wealth creation, the majority of Americans devote most or all of their money to category A, spending and debt creation.
This spend and debt creation behavior is practiced by adults who often learned it from their parents. They then teach it to their children through demonstration based on an overall ignorance of the subject of money. This perpetuation continues unconsciously, often passed on from generation to generation.
A lack of respect for and poor management of money eventually becomes inherent behavior. Permanent mindsets are developed which then translate to lifelong traps. These traps have ruined countless marriages, broken up more families than we know and have devastated lives throughout the years. As if thats not enough, vast amounts of worry, fear and sometimes even shame also must be endured.
These problems originate from an overall financial illiteracy at a very basic level. The lack of knowledge tends to lead people to have a very poor ongoing relationship with money. The world is happy to accommodate those who are determined to spend all of their income and then some. Since money doesnt stick around where its not wanted anyway, the full cycle of devastation is easily completed. No other outcome is possible.
But there is hope
All people, at any time and at any age can begin developing a determination to change this painful pattern and personal experience with money.
Once that decision is made, the next step to be taken is clear: become correctly educated about money and financial matters, beginning with developing a basic understanding. To learn about the principles of money from people who are truly qualified to write about and teach them is the starting point. A better overall comprehension and a more positive attitude towards money almost immediately begin to develop. Those so determined become more knowledgeable about the subject, receive better results personally and can eventually become equipped to help mentor others.
It isnt necessary for money to represent a lifelong struggle for people, to be a constant source of worry and concern. The evolution away from these conditions begins with an accumulation of basic knowledge of the subject of money. Financial intelligence forms and benefits begin to appear as a result. When understood, respected and managed properly, money becomes what it was always intended to be; a useful and positive resource for people and their lives
NOTE- We highly recommend that people begin their own personal financial revolution by reading books such as Robert Kiyosakis classic, Rich Dad Poor Dad. Many other good resources exist, but change only occurs after the decision to create financial betterment is made. We heartily encourage people to make such a conscious decision for their lives.
by: MathewOwens
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