Why Teach Financial Literacy?

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LukeLewis

LukeLewis

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Do you know what an asset is? I mean, do you really know? Would you say that your house is an asset? I would. I'd be wrong though. Houses are actually liabilities because they earn no income. Now, if you own a house and rent it out for profit, then it'd be an asset, but not before. All houses are, in general, are bills to be paid. Most of them are giant money pits.

Many people don't know much about money or finances. It's actually a wonder they ever get by. I suppose many of them don't, considering how many bankruptcies are filed each year in the United States. On average, there are about 750,000 non-business bankruptcies filed in this country annually. In 2004, there were just over 2,000,000. To me, this is an absolute shame. I'm tempted to say the reasons for this all have to do with the mismanagement of finances, but I know better than that. It's also because of the addiction to spending. Some people spend every last dime they own, no matter how much money they make or have. And no matter how much they know about money. They could be financial geniuses; it wouldn't matter. Money burns very large holes in the pockets of these types of people. For the rest of them though, going broke really is a product of ignorance. And not becoming wealthy is an even bigger product.

I'm reading Chapter Three, Lesson Two of Robert Kiyosaki's book called Rich Dad Poor Dad. I just made it through the very first part. This section is called Why Teach Financial Literacy?, so it'll be getting into a more nuts and bolts approach to this type of education. Enough of the railing on almost everyone out there for not doing enough or learning enough about wealth and poverty.

This short section talks about how Robert's friend Mike took over his father's empire and how Robert retired from real work in 1994. He uses a tree as an analogy for his wealth. He says that in the beginning, he had to water the tree and tend to it to make it grow, but now, the tree has rooted far enough down to grow on its own. He says that his retirement doesn't really mean he's not working at all; it just means that he can either work or not work, depending on what he wants to do. I guess that's what you call financial freedom. If you asked anyone on the planet if they'd like that type of freedom, I can guarantee that 99.9% would say yes. And that other .1% is just crazy. Of course we all want financial freedom. Who wouldn't? Personally, I wouldn't want to stop working, because I actually love it, but just knowing that if I wanted to take a day off to mess around, I could, without any serious financial consequences. Can you imagine how great that would feel?

I'll be discussing every section in this lesson down below. Beware, there will be a lot of discussion about assets, liabilities, income, and expenses ahead, so brace yourself. If you've ever taken any accounting classes in college, this should be a breeze. Unlike those accounting classes though, what I'll discuss will be much more reality based. Onward and upward.

This post is part of a series: Rich Dad Poor Dad by Robert T. Kiyosaki
 
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Why Teach Financial Literacy? was posted on 06-05-2021 by LukeLewis in the Finance Forum forum.

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