Will what parents ever give you the advice that in order to become rich they need to study hard, get good grades so they can get a good job? I know I have heard this advice many times from my parents. Aim the fact is that good grades without getting along ensures that you will become rich. Even many doctors, who are often the ones with the best grades, are now struggling to make a lot of money. If you want to get rich, without needing good grades, read on.
One thing they don’t teach you in school is that the banker never asks for your report card. If you go to your bank and apply for a loan, be it for a business, property, or some other investment, then your banker will not ask for your school report card. Your school report card has very little relevance to whether or not you will get rich. There are many highly educated people who are poor and struggling to earn money. There are also some very uneducated people who are millionaires and billionaires.
Schools are developed to train people to look for work, but this alone will not make you rich. Often times, it is the educated people with the highest paying jobs who are in debt the most and are in the worst financially viable place. You don’t need good grades in school to get rich, but you do need a good financial education. Many people leave school without the slightest financial education. Many are deeply indebted to school fees and spend their whole life trying to get out of debt.
A little very simple financial education can save you a lot of time and trouble and can make you rich much faster. In fact, someone with a lot of financial education, but without much school intelligence, is much more likely to get rich than someone with a school intelligence but now financial education.
smart in school are more if you can make finer distinctions. Let me give you an example. If you can tell a car from a truck, then you have some intelligence. However, if you can distinguish a 1987 Ford Laser from a 1990 Ford Laser, then that is a major distinction. You are reliable to understand things in more detail and therefore you are smarter. In school you have also been taught that there is often more than one meaning to a word. For example, the word means the grouping of pounds many different things. It can mean money, in the form of English currency, it can refer to weight, it can refer to a lost dog’s house, or it can mean hitting with a force. The word has multiple meanings.
In finance, some words have different meanings. Only in finance one meaning will make you poor and another meaning will make you rich. Neither of the two meanings is right or wrong, just different, but they have very different results.
One of the great words that most ever understand in finance is the term asset. Now your banker will tell you that an asset is anything that the owner owns that is of monetary value. This includes your old golf clubs, your suits, and your car. This is the correct meaning of the word active, but will do poor. A better understanding of the word asset is something that earns you income, whether you work or not. Simply put, if you stop working today, an asset will keep putting money in your pocket. A liability is something that takes money out of your pocket whether you work or not.
A lot of people are poor because they spend their time that fashion assets are passive. Buy things of monetary value that costs have money. Owning a car costs money every month. So even though, as defined by the edge of an asset, they are acquiring an asset, they are getting poorer. Rich people focus on spending their time and money to acquire assets that generate income. It is these assets that make them rich, and it is the ability to define the difference between an asset and a liability that makes them financially smart.