Rich Dad, Poor Dad - Lesson Two - Why Teach Financial Literacy?

By Hayley Keen

Because there is a need!

Society is too focused on money and not wealth which is created through financial education.
Money without financial education just comes and goes. It's not how much money you make that's important but what you do with it, how much you keep and how long you keep it for.

How many lottery winners, athletics, actors and musicians have you read or heard about that have won and made good money, but within a short period of time it's ALL gone?

Consider the poor and middle class who work hard, pay taxes, buy a home, new furniture, a new car, and start a family. Their liabilities and expenses increase so they work harder, earn more money, pay more taxes, consolidate their debts, extend the life of their home loan, then they go shopping with fresh, clean credit cards, they work harder to earn more money and so the cycle continues.

Most people, who own their own home, continue to buy bigger, better houses without having paid the previous house off and in the end they never own their own home. For most people their home is their largest investment. For many, owning their own home is simply their only dream.

They do it because everyone does, because they fear being different and taking a risk. But it doesn't have to be...

The power of financial literacy and personal development allows you to question your situation and take control of your wealth.

Let's look at the financial situation of owning your own home.
- Your home increases your expenses - after tax expenses, such as utility bills, land/property tax and rates.
- Your home does not always increase in value - the market does drop and if you are forced to sell you may find you owe more than your house is worth.
- Your home ties your money up - you may miss opportunities to buy incoming generating assets

Now, let's look at the impact of buying a home (that's too expensive) instead of investing in income generating assets early.
- You will suffer from loss of time - when your assets could have been experiencing real growth
- You will suffer from the loss of addition capital - income generate from assets which could be invested in further incoming generating assets instead of paying high home expenses
- You will suffer from the loss of education - through the experiences that come from investing

Why Teach Financial Literacy? You need to understand the difference between an asset and a liability, Robert's rich dad believed in the K.I.S.S principle, he explained assets and liabilities as assets put money into your pocket and liabilities take money out of your pocket.

Once you understand this difference, focus on buying income generating assets (stocks, bonds, notes, real estate) and concentrate on minimizing liabilities (mortgage, loans, credit cards) and expenses (taxes, interest, utilities, insurance, maintenance).

This article was inspired by well know Investor, Entrepreneur and Educator, Robert Kiyoaski's famous book: Rich Dad, Poor Dad. What The Rich Teach Their Kids About Money - That The Poor And Middle Class Do Not!

Hayley works with an amazing group of entrepreneurs with an incredibly powerful marketing system in place.

This marketing system is the sales engine for a Texas based Financial Education company. For more information click here!

Hayley is a successful online entrepreneur, committed to sharing her knowledge. Hayley's mission is to inspire others on their journey to success.

Article Source: http://EzineArticles.com/?expert=Hayley_Keen
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