I want to talk about the importance of financial literacy.
Believe it or not, a lot of the problems of society today are somewhat tied to financial literacy whether it be from the high rate of divorce to suicide and many other things that happen. People often struggle with money issues, and, that in turn affects other areas of their lives.
| Disclaimer: I am NOT a financial advisor and this is not intended as financial advice. The information given is from my experience and is for entertainment purposes only. Do your own research before buying anything. |
A lot of people will say, "Stop being so dramatic." Well, I don't think that's the case. To be honest if you look at someone who has traveled and seen people throughout the world and had the privilege to be in different countries, they can tell your financial issues translate in any language.
Financial issues dealing with not being able to provide, not being able to afford to live in an area where you want to, not getting the things that you want for your family, your children, your wife, your spouse whatever the case may be can create unseen effects everywhere.
Poverty and all the different things whether you're in North America, Africa, Asia, Europe, or South America whatever the case maybe these issues remain.
So being financially literate is something that is very important.
Before the internet, you would have to go to a university and take financial courses to learn some of the information that is now readily available online. Platforms such as youtube and many others are available where you can get the information for a fraction of the cost or even free.
I want to teach you something very important.
“The rich don't keep their money in banks”.
Why?
Because there's something called inflation.
Here's information, a truth, that the wealthy and the rich have access to very early as young children and continue to learn as they are growing up. So they understand that financial institutions like banks are not the traditional way for them to keep and grow their money.
Why is that?
We have to understand what the solution is. I've seen different numbers from different videos I've seen on youtube and some of the online information from government data to private studies. But, according to inflationdata.com, as of 2017, the average inflation for the year was about 2.13%.
So, let's just averaging out to two percent. You could probably safety say that that percentages are going to carry out in 2018 unless we see some unforeseen cataclysmic financial disaster. They can increase or decrease whatever the case may be.
How would that relate to you?
Simply put, that increases the price of service and goods. Let's say you go into a grocery store and by the time you get to check out, you decide to buy a pack of gum. That pack of gum cost you $1.00 on January 1, 2018 while that same pack of gum on December 31, 2018 would cost you $1.02.
That's NOW the cost of that pack from gun.
Why?
Because of inflation. As inflation increases the price of goods and services increases as well. So, as you can see the price of goods and services does not remain the same as the year goes on. It increases by 2%.
But let's say, for example, you kept your money in the bank because it appears to be the best place to keep your money. So you deposit your money in the bank.
Well, if you put one dollar in the bank and they tell you they are going to give this HUGE interest rate of .03%.
What does that mean?
That means if you put $1 in the bank on January 1st, by December 31st you would have $1.0003. That’s The Definition of CRAZY.
So, in other words you cannot even afford to buy a pack of gum on December 31st.
Why?
Because you have less money in the bank. The price of the gum increased and the percentage of interest you received from the bank, well, that didn't keep with inflation at all!
Putting money into a bank is actually losing YOU money.
Why?
Because inflation increases and the rate of interest you are getting from the bank doesn't rise at all.
I know you're probably thinking well my bank will have to give me more than that.
Well go check your bank. Unless you have some sort of premium package or are a premium customer, they maybe offering you .006% or .008%. Sometimes I've even seen as much as .01% but that's in very very rare cases. Unless you decide to tie up your money in IRAs or cds which means you cannot use your dollar for three to five years.
Well what if you need your dollars tomorrow?
That's why rich people don't keep their money in banks.
Why?
Because whatever amount of Money you keep in banks actually loses its value compared to the goods and services in the market.
So, really that $1.00 you kept in the bank is only worth $0.98.
Why?
Because your money has actually lost value. Now you cannot afford to buy a pack of gum that costs $1.02.
Isn't that crazy. You went to school for four year and no one has explained to YOU the simplicity of inflation and where to put YOUR money after spending close to $80,000 in college education.
I know, I'm upset too.
So, you might be thinking well that is just crazy. So, where should I be putting my money if I don't want to keep it in banks.
Well, here’s how rich people would differentiate themselves.
It's the knowledge!
They are financially knowledgeable enough to understand that there are various vehicles that are much better than banks where they can keep their money.
What rich people do is keep their money moving.
What does that mean?
Whether you choose to put your money into a business, into real estate, the stock market, cryptocurrency, or whatever the case may be. They put their money where theit money works for them and has the potential to generate more money.
Today, with technology and access to information, we can gain access to the same knowledge that some of the wealthy people do.
So, instead of inundating YOU with knowledge paralysis by having YOU watch 10 videos on how to make money online.
Here are the basics.
Don't keep your money stagnant in a bank account.
Why?
Because, as with the example above, it is actually losing value. So, try to keep your money moving. Whether that be into a business, stock market, cryptocurrency, or real estate.
Keep it moving.
Find a place to put your money so it has the potential to generate more money. That's how you keep your money moving and increasing the value or the money you have.
As I promised, this is a short video. Please, subscribe to our list as I have more amazing great talks on this. Especially if you see yourself as an entrepreneur and want to learn how to make money or you want to generate enough money to take care of your family. Perhaps even use to fulfill some of the projects and dreams that you have. It’s definitely possible for YOU.
Being financially literate and knowledgeable as to what to do with your money is what's going to separate YOU from the majority of the people.
Most people suffer because of lack of knowledge.
Hope this has been helpful.
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