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We Must become Financially Literate

We Must become Financially  Literate

We live in a capitalistic society. America is the super power and the world follows its financial system. It’s driven by money and how much money you have depends on the amount of money you have. There are only a few exceptions to this rule but the percentage of people in this category is a minute percentage like areas with oil, diamonds, or other rare natural resources needed for people to live a certain how level of lifestyle. Others exceptions are those creative people that come up with invention that change or revolutionize the way people live and can protect their invention from corporate thievery. The real wealth is among those who have controlled or maintained the wealth that was in their family for years. It has always been a fact that you have to have money to make money. Again there are always exceptions to every rule. Entrepreneurs who work hard, earn themselves a lot of money and make themselves rich is an example of the exception to the rule. The truth is that they have to be financed by someone or something. The federal Reserve bank is one of the must low-key but powerful institutions in the world. They know that the house always win so they don’t make a noise, but are waiting in the dark like the boogie man and will do what every it takes to keep the global economy afloat. It is beneficial to the rich, and most others don’t  understand or care about it or what business it conducts. We really need to learn more about how money works and how it is important to save for our future generations.

A lot of people come from an upbringing of limited financial resources or just enough to maintain a modest lifestyle. These people tend to do one of two things when they are in a better financial situation. They will buy all that they can afford and beyond with credit cards (debt) to make up for the times they weren’t able to do so. In contrary, the other person will save by hoarding money and living a life with financial restraints and limited financial risks. The one who is trying to make up for lost time and buying everything they didn’t have are teaching their children bad financial habits. This mentality is usually referred to as “keeping up with the Joneses”, which is trying to compete with others to always have the newest and nicest material possessions at any cost. The second person that lives a financially safe life and hoards money is teaching their children bad habits as well. We are here on Earth to live. They are raising their children with a mentality of fear of finances. There should be a balance between these two types of financial mindsets. Financial freedom comes in the form of balancing your finances with a list of knowledge of things you want out of life and your own financial realities. Prioritize your wants after already putting your household needs on the top of your list. Your wants will act as motivation for you to save and develop more streams of flowing into your household. I have been told that a household should have multiple streams of income flowing in, but I have also witnessed people spending money faster than it flow into the household. People have the propensity to increase their spending once the income increases, however when this does occur they are less inclined to save money. The people with a financially balanced mentality will use one stream of income to pay the house bills and also save at least twenty percent. They will use their second stream of income to invest in the stock market, and the remainder could be use to purchase a want or two.

Debt is the modern day slavery. Slavery in America started with indentured servants. They agreed to work off a debt or a service that was rendered to them (passage to America) or bad financial decisions they made in England (keeping up with the Joneses) and decided to pay their debt in time spent serving a master for a certain amount of time. This was actually a practice throughout history. After slavery was over landowners could not legally or physically enslave humans  anymore so they did it financially through a system called share cropping. They knew ex-slaves didn’t have any money so they allowed them to borrow a piece of land which they were charged rent for ($50), they rented the tools and farm animals ($25) and the seed ($10). When the crop came in, if it came in, the owner of the land will pay the share cropper $50 for the crops and will be $35 in debt or more because the store owner (a lot of time the land owner) will extend them credit too. After years of this the share cropper would get deeper in debt. Parents of college students should be aware of the predatory practices of credit card companies on campus issuing credit cards to your children. When I was in college this was a common practice that was utilized and students were getting in debt early. It was too easy to swipe that card and get the item immediately, which could be paid for later. Parents need to have these finance conversations with their children at an early age. People now fall for these credit schemes. They have these businesses that are giving money to people to use their cars as collateral. The deeper in debt, the more desperate you become for a quick solution, and there is rarely a quick solution that will not damage your credit (like bankruptcy). I know people that filed for bankruptcy and it helped them at the moment but it ruined their future. You need credit to buy big things like houses, cars, and some jobs look at your credit to see if you can be trusted or easily corrupted. Keep a balance so you can maintain a credit score of 760 or higher.

Make money and never let money be your identity. The business world will judge you on what you have in order to sell you more. Have integrity in every financial decisions you make and take time to research any potential deal or purchase. There is no such thing as free because free things usually require a lot of your time to attain it and time is your most precious commodity. If it takes me two hours to stand in line, fill out paperwork, or go far to pick it up I get paid $30 an hour then that item cost me $60. Be aware of financial predictors or predatory systems that are created to entice you to go into debt for things. Take your time to acquire things or wanted material processions because you appreciate things that you work for. Save some money and invest in the stock market. If you are not knowledgeable or business savvy, hire a trusted financial adviser or do it through a job 401 or 403 program. Try to match your skills and passions to other revenue streams that will bring more money to your household but remember not to increase your spending to match the revenue coming in. Love yourself and your family and never money. Money is to be managed not loved, it can’t love you back.

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