FINANCIAL LITERACY - KNOWING WHAT NOT TO DO - KEY NUMBER TWO
Highlighted below are the top five reasons (associated with a lack of financial literacy) why most people remain poor. If you can successfully avoid these 5 devils, you might just be in the class of millionaires sooner than you think.
Most poor or average people come from a background where they grew up under unsuccessful parents, go to a school where the students are not from wealthy homes, never had closely related with any wealthy person, always socialize with poor people, work in a place filled with poor and struggling folks, and have no wealthy or rich models to look up to and learn from. This is a typical scenario for the larger percentage of humans on earth at the moment.
This state of reality is daunting and can damage the spirit of a young, struggling fellow. Because of the circumstances surrounding his/her background, the fellow finds it almost impossible to dream of wealth, let alone pursue it. Worse still, there is no opportunity to learn the intricacies and finesse in financial literacy – which is best learnt in a real life situation with practical day-to-day examples witnessed in family, friends, co-workers, or role models.
Good news is that out of this seemingly impossible quagmire, many have risen to greatness.
Even when the awareness that achieving wealth is possible, most folks find it difficult to decide to become wealthy. The ‘can-do’ attitude can never come into effect until that decision to become successful is made. In fact, many are too afraid of success and its attendant responsibilities and challenges that they prefer to remain in the shadows, surviving pay-check after pay-check till they reach old age and die in misery. Financial freedom is kick-started on the day when it is affirmed unequivocally, “I am going to be wealthy and successful.”
Not deciding early enough to commence acquiring financial literacy is a recipe for catastrophe. Even though money is made in large volumes but spent with a lack of knowledge of financial numbers, it is certain to be lost sooner than later; there is no short cut through it. Conversely, a mind that has decided to be successful should also get interested in learning how money works, how it is made and sustained through time; it would compel the fellow to seek out mentors, and opportunities to learn. Anything short of that is disaster waiting to occur.
The fear of the unknown, the unwillingness to take risks, the uncertainty of tomorrow, and other such thoughts are messengers of procrastination. This factor have caused so many to postpone their progress to an indefinite future – and mostly the case, they never find the courage to take the bull by the horn, or in many cases, live to see that future.
The market would never be right; you may never have enough security to take the plunge; it would never be the right month or season for taking that risk; someway, somehow, there would always be something obstructing your chances; there would be one or more reasons to pull back; that is the truth about life. But in reality, every successful person also found him/herself in these types of situation. The edge they have over unsuccessful people is the shove to plunge in, there and then, risking it and damning the consequences. And like some guru would say: “if you don’t win, at least you’ll learn.” That’s how financial literacy builds up over time – from your own failures and experiences. It remains the best way to learn how money would work for you.
Not finding the courage to admit ignorance and humble yourself to learn the ropes on time leads to certain failure. The opportunities are there – in the newspapers, the TV, crash courses, mentorships, books, and a whole gamut of means to learn how money is made and grown. Procrastinating on when to start is akin to postponing the day of your success.
The urge to spend, to shop; the craze to be in vogue, to appear classy, are some of the most debilitating reasons the vast majority remain poor and unsuccessful. Not having the moral and financial discipline to resist the myriads of temptations crass capitalism and unprecedented commercialism throws in their faces every day is one of the major causes of deep-rooted financial failures and gross underachievement witnessed worldwide today.
The inability to put aside just a little out of your earnings and allow it grow exponentially – with the power of compound interest – can spell doom in your quest to get to the top. In fact, this is one of the key indices that separates the rich from the poor. The rich struggle to make money, save, live frugally, invest in more money-making-ventures, become more frugal, and then cash out after many years of sacrifices. This compounded interest and growing investments/businesses are sufficient enough to see them through their older years in great happiness and satisfaction; and perhaps leave something tangible for their children too.
Conversely, the poor who lacks simple financial literacy earns, spends, and spends even more with stacks of credit cards and humongous bills waiting to be cleared – they ‘live life to the full.’ But the end is always a disaster – broke, out of a job because his/her age and expertise does not conform to modern-day reality, this fellow would now unfortunately rely on state welfare, meagre pension, or children’s magnanimity to survive.
It is always a sad end for people who do not know how to delay gratification until those items of pleasure can be paid for with compounded interests or profits, not current salary or wages. On the other hand, getting a good grip on what is required to be successful through sound financial literacy would automatically transform the mind of the fellow in question from a spendthrift to a prudent spender and an even better investor who is now business-oriented at all times – even while still on a salaried job.
Not having financial literacy gives rise to myopic views about how the world works. A success-minded person projects far into the future, is able to commit some money into bigger, longer-term investments, and able to delay gratification also. This attitude helps you in becoming far more thoughtful and precise in your actions; especially as it concerns how you spend your time and money daily. With your mindset continually projecting into the future, everything you do, every decision you make, would be towards the same goal – make money and be successful. Even the universe cannot deny you this bliss.
On the contrary, a fellow lacking financial literacy lives pay-check to pay-check, month to month. People like these spend as much as they earn, no savings, no investments, and no future. People in this category find it difficult to persevere and exercise patience, their spending habit is precarious and they live on debt almost their entire career.
In effect, cultivating the habit of acquiring financial literacy along the way all boils down to the mindset. A strong, positive, growth-mindset is full of confidence, is always looking to improve on present situations, and sets big realizable goals which in turn drives him/her to financial independence and success. A fixed-mindset fellow, on the other hand, is scared of the future, only willing to live for today, and believes that improvement on present situation is impossible. Hence their ‘gluttony’ and insatiable appetite to spend, buy, and acquire as much as their paycheck can afford without recourse to tomorrow. The link between financial literacy, positive mindset, wealth, and success has never been this clearer.