The Only Way How to Make Money so the Money will Make You
Are Your Financially Literate?
Most people I have talked to, remember that one kid at school, who always asked the teacher the killer question "I just don't see how this will help me later in life". Its funny how the teachers never bothered to answer this question isn't it?.
Wouldn't it be interesting to go back and appraise the subjects you learnt back then, just to see if those kids were insightful, or just cheeky. To review the things we learnt back then to see how much it helped us get to where we are today. This article is not about this though, rather it covers a slightly different topic.
There is one subject at school that everyone should be taught, as it would be invaluable in helping us all make our way through life, no matter what background we come from, or where we are going. This subject is never on the curriculum though. I don't understand why. It is Financial Literacy.
In an ideal world, we would all be taught this subject and basically learn the implications of making a bunch of decisions about finances and personal money management. It would start with simple concepts and develop to more complex ideas. The ultimate purpose of this subject would be to arm us with enough financial knowledge so don't make the idiotic, financially ruining decisions so many people make every day today. The subject could run something like this.
Week 1. Is that a scam? How to recognise scams and not get involved in them. We hear about people losing hundreds of thousands of dollars to these every year.
Week 2. How much can you borrow? This lesson would teach us tohe way to determine how much money we can borrow for personal or business purposes. This would include many financial vehicles including credit cards, personal loans, business loans and mortgages. It would mainly concentrate on cash flow issues and how they relate to servicing our debt, but would also touch on the tax effectiveness of some of the different loans.
Week 3. What type of assets do you own? In this lesson, different assets would be explained. For example, we would learn the difference between an appreciating asset and a depreciating asset. Similarly a consumable would be compared to an asset which earns us income. These assets would be compared over time, so we would learn how buying different things impacts our net wealth over time.
Week 4. What investment strategies are right for you? This lesson would run through different risk profiles, explaining short term and long term, what can go right, and what can go wrong with these profiles. This would enable us to decide in our own minds, what our tolerance to financial risk is, and therefore make better investment decisions.
From there, this class would explain some robust investment strategies for the different risk profiles, such as our Stock Market Trading Strategy and our Foreign Exchange Trading Strategy. Both these strategies endeavour to maximise returns while minimising risk, and therefore would be ideal for someone with a middle ground level of risk tolerance.
Week 5. Should you leverage your investments? Here we would learn the advantages and risks associated with leveraging investment protfolios. The lesson would be similar, but more in depth, to what we have done on our Investment Financing Advice page. Tax would also be a big feature of this lesson, as there are some substantial tax advantages to be had when borrowing to invest.
Final Week. Putting it all together. This class would take us through action point steps we need to take to avoid the financial problems so many people face, then explain how to structure ourself to maximise our legal protection and tax positions. And finally, what actions we need to take, to use the money we have to most effectively create wealth and income, given our personal tolerance to risk.
At TheOnlyWay.com.au we have made some small inroads into bridging this gap in our education system. Combining our high yield investment strategies with our free email newsletter, we endeavour to educate and arm you with the knowledge and information you need, to make the best investment decisions you can, to make your life much easier in the years to come.
__________________________________________________________
TheOnlyWay.com.au - Learn the only way to live the dream. Make some more money and let that money make you.
Webmasters, you are welcome to reproduce this free article, as long as you include the footnote above
