Lesson Two:MASTER FINANCIAL LITERACY

Lets me start the next lessons from the excerpts of his book "Rich Dad Poor Dad"

“I am concerned that too many people are focused too much on money and not their greatest wealth, which is their education. If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer through the changes. If they think money will solve problems, I am afraid those people will have a rough ride. Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.”

What is Financial Literacy?

Financial literacy is conscious education on the issues of money an d how to personal finance.Our educational system does not teach us about money but aspects us to go out there and make money.Because financial literacy is not thought in school, you need to search for avenues where you can learn about the issue of money i.e How to make money, how to invest money and how to protect the investment. Financial literacy teaches that it doesn’t matter how much money you make,but how much you keep and how many years you keep it. It also teaches that whatever your current state of earning investment can be made on each income.You need to start learning how to save the pennies  before  you can master how to save the millionaires.

ASSETS Vrs Liabilities

One vital lesson you learn from financial literacy is knowing the difference between an asset and a liability and investing in assets. In a lay man’s view, an Asset is anything that put money into your pocket. Liabilities on the other hand is something that takes money out of your pocket. Assets generates income whiles liabilities generate expenses. A car, can  be an asset to someone and liability to the next. The underlining difference is whether it put money into your pocket or takes money out.A GSM phone can be an  liability to a senior high school student but a great asset to a business owner.

There is the need.You need to be financial literate to survive these evolving world of financial crisis every single year

“Most people fail to realize that in life, it's not how much money you make, it's how much money you

keep. We have all heard stories of lottery winners who are poor, then suddenly rich, then poor again.

They win millions and are soon back to where they started. Or stories of professional athletes, who,

at the age of 24, are earning millions of dollars a year, and are sleeping under a bridge by age 34. In

the paper this morning, as I write this, there is a story of a young basketball player who a year ago

had millions. Today, he claims his friends, attorney and accountant took his money, and now he

works at a car wash for minimum wage.” -Robert Kiyosaki