The public education system is heavily designed to force you into working a 9-5 job until retirement. Without adequate personal financial literacy instruction in the classroom, books are the only option to gain knowledge on financial freedom. Public schools should introduce a nationwide program that requires students to read the books like “Rich Dad Poor Dad,” by Robert Kiyosaki. This will ensure that students are aware of the ways to maintain a healthy financial lifestyle. Everyone has the potential to save a percentage of their paycheck, but only the financially intelligent will reinvest their savings.
People’s lives are controlled by two emotions: fear and greed. A majority of one’s education comes from the school education system. Over the years, the public education system has downplayed the necessity of learning finances past a savings and checking account. Consequently, society has taken a major pitfall through not educating the youth on the subject of money. Furthermore, this proves to be a sole example of the outdated education system. The less fortunate kids are at a severe disadvantage because their parents likely do not understand how money works. Most of the time, only the middle and upper class discuss with their children, thus creating a larger gap between each class annually. According to the Council for Economic Education in 2019, “17 states require that students take a personal-finance course to graduate high school, and only five require that the course be a full-semester standalone.” This country needs some serious reform to increase the number of states that require a personal-finance course. I would love to contribute to the personal-finance curriculum taught in public schools.
Robert Kiyosaki, the best-known author of the number one personal finance book of all time, continues to inspire millions of people to change the way they view their money. Kiyosaki’s story resonates with millions of Americans in that he experienced two varying types of parental figures in his life, a rich dad and a poor dad. Throughout this incredible book, there are seven essential principles that dictate how to become financially successful. The seven principles are: the rich don’t work for money, financial literacy, minding your own business, the power of corporations, the wealthy seize the opportunity to invest money, work to learn -- don’t work for money, and overcome obstacles. Throughout teaching each of these principals holistically in detail, students will develop a keen understanding of key points to success, such as understanding the difference between a liability and an asset, building and maintaining a strong group of assets, and training your financial IQ.
The process of training your financial IQ is one of the most critical applications to becoming a successful adult. A financial IQ is comprised of knowledge across several broad topics, relating to the synergy of all your skills and talents. These broad topics include accounting, investing, and understanding markets, and the law. The accounting sector ensures that you’re able to read and understand numbers on financial statements. Furthermore, the investing sector allows you to use your money to make more money. Next, understanding the markets allows for the concept of supply and demand to alter one’s perspective. Lastly, comprehending the tax laws allows you to keep more of your own money.
An everyday example compares two different family philosophies. They earn the same amount of money and have the same amount of money available. One of the providers spends every day working for their money. They feel like they can’t ever get ahead. The other provider spends their time researching assets to add to their collection. The first provider exchanges their time for money, while the second provider acquired their money mostly from assets. Overall, the rich acquire assets that make an adequate amount of revenue. With that being said, a common misconception in the marketplace is the difference between good debt and bad debt. For instance, taking out loans to attend university is considered good debt because you are allowing yourself to get hired at a well-paying job through earning a degree. On the contrary, unpaid credit cards are considered to be bad debt, due to the fact that this lowers your credit score and ability to purchase any large possessions.
The core reasons why the wealthy are so successful financially is due to a combination of factors, such as index/mutual funds, bonds, real estate, and Roth IRA’s. Wealthy individuals find a way to acquire at least five different sources of income. The stock market plays a huge component in their success rate, too. These critical methods are the types of lessons we should be teaching the youth, instead of outdated materials. Moreover, the process of setting up and contributing to a retirement account is not taught, hence why “63% of Americans don't think their savings are on track or aren't sure,” according to the Federal Reserve's “Report on the Economic Well-Being of U.S. Households in 2019.” Likewise, at least 20% of your net income should be saved and/or reinvested in strong assets. There has never been a more ever-growing need to understand how to balance a checkbook, comprehend your personal income taxes, and budget your months into essential items. Our society tries to engrave in your mind that everyone needs to own cable TV, spend an excessive amount of money on designer clothing, and dine out, etc. This couldn’t be further from the truth.
I want to create a society where Americans realize that we are not completely stuck in this alternative reality where finance classes are non-existent. We have the power as a nation to bring change on a large scale. Only the risk-takers will make the most financial progress in today’s society. Understanding the value of time in relation to money is a crucial step into succeeding in the finance world. The concept of compound interest is far too valuable to miss teaching in schools. The time has never been more prevalent to prove the American people’s resiliency in personal finance to the rest of the world.