Are you a Financial literate ?

Ankush By Ankush, 2nd Nov 2014 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Business>Investment

Well educated people sometimes fail to be financial educated. So, here i am going to emphasis the importance of financial education to everyone who never want to make their life a living hell and take full advantage of suitable ways and conditions to empower themselves financially .Theme of this article also speaks about how different is being educated from financially educated.

What is financial education?

When ever we hear the word finance or financial related things, the first things that flashes in our mind is money. So, to what extent are you able to capture the money you earn or gain in an efficient way? yes, i mean save or re-invest it.

Before we enter this discussion, I do have few questions you need to answer to yourself.

What money means to you exactly ?

Is it just a source/means to satisfy your needs or some thing more than that ?

Do you really want to be rich and if yes what are your ways to get rich ?

Financial education is all about being financial intelligent and capturing the right ways amassing mammoth.It is about exploring new ways of improving your wealth.

There are many ways of improving your assets.Lets discuss them in later sections

Importance of Financial Education

Being educated or literate is far different from being financially educated.Let me illustrate few examples, A highly renowned and popular star ends his life in rags because of his financial ignorance .All his stardom ,name ,fame, glam and sham fades away as he has no more wealth with him and all his allies belittle him. Bankrupted and highly stressed, he ends up in vain and no one ever remembers him because of his cowardly act.Just think what if he held his wealth, where he could have been? How brightful his career and colorful his life could be ?

Here comes one more example emphasizing importance of being financially literate.An uneducated person who just had his basic primary education, is a billionaire now.This happened because of his financial intelligence and his approach to earning and spending money and his ability to understand the market and business he is involved in.

It is never a mandatory per-requisite for you to be an highly educated person to be financially educated. Financial literacy comes by paying attention to your everyday transactions and by observing how unknowingly you are being part of some others business by owing their products or goods.

What are people's perception of fincancial things?

When ever people about financial related things like investments they are panicked because they dont have much knowledge of it and they feel it is not their cup of tea.But y?

Yes, this is the question banging me since have learned about the importance of financial education and ways to get financially empowered.

I have asked few of my friends, colleagues, peers and close relatives and found few interesting things.I am going to list few of them here for you .If you are one with these kind of thoughts then i bet you are wrong and need to change your angle of en-vising these things .

Most commonly heard statement is "Investments into markets are highly risky and many people have ended up gaining nothing but losing even their life by running into debts".
This statements pushs me into a great laughter as i envy people that they have learnt a thing from the experience of others but i pity them that they have left few things that the person has not followed that has caused him to end up in nothing.

Generally people entering into investments are naive and do not have much knowledge and they enter without consulting any expert and no suggestion from any other persons are taken.The first mistake they make out of their ignorance is that they invest all their asset on a single commodity or product thinking it would grow but they do not realize that there is always a fluctuations happening in every business , lucky if asset grows then everything is good but on the other hand if it does not they will be forced to hold untill it regains and in this process the investor can face heavy losses, This is the reason they end up in vain.Lets take up the case if he gains, In this case he will be lured to re-invest by making the same earlier mistake of investing on a single commodity.At a stage he learns this is a mistake but this can unfortunately happen only after he faces heavy losses.

First thing every person has to learn not merely as an investor but in generic life that "Diversification is very important and can makes your life stable".

Second mostly heard statement is "We do not have any knowledge of investment".

This statement comes because people are afraid to learn and work with numbers .Investment is all nothing but a game of numbers that has to be played with much interest .Let me clarify nothing can be learnt untill you have enough interest into it ."Every thing you value in life will grow in value" this statement has to be remembered for ever .I once heard people are ready to ignore than to check their balance sheets and re-calculate their earnings and spending.This attitude of people make them less interested towards financial things.

Believe me this is one of the interesting and life's most important subjects to be learnt.

Basic and Important steps

First thing every financially educated person has to learn is to save. Save your wealth, assets.Hunt ways to save your money .
Make list of all your earnings and expenditure for a month and figure out all the unnecessary spendings you have made for that particular month.You need to minimize this list of spendings by control your spendings on miscellaneous things.

There are three different kinds of savers according to me.
1) Never Saver
2)Idle saver
3)An Intelligent saver

A never saver never saves any money and he is complete dependent on his source of income for his survival.

An idle saver saves his money but he the money he saves will be stagnated .He never utilizes them to make more wealth of it

What we are more relating is to an intelligent saver.An intelligent saver not just saves but tries to capitalize his savings in an intelligent way.

Second and most important thing is to invest.It is very vital as this is the only way you make your wealth and assets grow in value .This is important as this alone differentiates you from the set of people who save and do nothing with their innate potential in their hands.

"Never work for money,Let your money work for you", these words were said by the famous financial educator Robert kiyoski in "Rich Dad Poor Dad".

Modes of Investments

Investment is one of the vital aspects every individual has to understand.There are many traditional investment policies a user can opt but need to understand them properly before starting investing in to.

Before starting investing you should be clear be with your targets and goals you have set for yourself, as they play a crucial role in determining the mode of investment policy you need to opt for.

Time and returns are both inter dependent, some time may not be even.But be clear whether you have set long or short term goals based on your needs.

Long term investments will be fruitful and less risky when compared to short term investments.But short term investments can be highly fruitful when you have a close watch of them and enter/exit at the right time can make you make your returns multiplied.

Do remember this important quote "Every penny of yours is an employ of yours which will work to make you rich".

So try to capture the amazing potential that you hold with you to make it larger


Financial Investment, Saving Money

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author avatar Ankush
I am intrested in writing about financial related stuff

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author avatar Sivaramakrishnan A
2nd Nov 2014 (#)

There are many avenues to invest and they depend on the time frame too. From my experience, only one or two companies reward their shareholders. So term deposits, government securities and some insurance should top the list - then always look to invest in own venture so that we are in control - siva

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author avatar Arjun Togiti
11th Nov 2014 (#)

Thoughtful Article Kush. Nice Job !!!

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