In order to live a financial problems free life, you need to be a financial Literate. Now, what is Financial Literacy?
According to www.investopedia.com, Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. The lack of these skills is called financial illiteracy.
I define Financial Literacy as the ability to successful do MMM and win!
Financial Literacy is knowing how to Make, Manage, and Multiply Money Successfully.
The MMM stands for Make, Manage and Multiply.
But, the underlined word is how to manage all the 3Ms successfully. Most people only know and care about how to make money. They can sell anything and make money but year after year, you see no improvements in their finances. They are always in hardship.
And hey…It is not that these people are not educated, they are mostly very educated.
Growing up, I know a Nurse who has been in service for 35 years and will go on retirement in the next 5 years, but sadly, she has nothing to fall on and the only hope she has is her pension. The bigger problem is that nobody teaches us financial literacy in our schools. It’s not our teacher’s fault too. It is because they are not financially literate too. This is a pity
If you don’t inculcate the habit of Making, Managing, and Multiplying money, you will become a slave to money and work till you die. It doesn’t matter how much money you make.
Now, the big question is, How Do we Become Financially Literate?
If someone is illiterate, which is book illiterate, that is if you don’t know how to read and write, what do he/she do?
He/she goes to school right? Yeah.
Same thing applies when you are financially illiterate.
To become financially literate, you’ve got to be a student of money, you’ve got to learn how money works, you’ve got to understand how money works, and master the money language. If you are financially illiterate, attend seminars whether it is free or paid. Go!
Be very hungry to always know more about money. Your quest for financial information will boost your financial literacy more than anything else.
You can’t say you want to become financially literate and won’t take reading serious. It is like a student saying he wants to pass an exam without reading, What will the result be? Your guess is as good as mine. That person fails right?
Let’s quickly look at the 13 Money Mistakes You Must Avoid if you must break free financially.
Money Mistake 1 – Never borrow money that accrues interest to start a business.
When I mostly say that people shouldn’t borrow money to start a business, a lot of people tend to raise eyebrows, because today, they see a lot banks asking them to come for loans, but the truth is, when you start a business, there is a possibility that you might fail before you succeed. And so when you go for loans, especially in our part of the world where the interest rates are high to start your business, you are likely to face difficulties, you might start this business, beautifully. And people will start praising you seeing your beautiful shop, seeing your beautiful office, and then people start coming to you for their money with their interest. Trust me. Some people even lose sleep, and some people even develop high blood pressures, before you know that business that started beautifully now is draining, and then everything goes to the ground so it is a big mistake to borrow money to start a business that you don’t even know the future of that business. So that is the first mistake that a lot of people make. This interest and the capital that you borrow to start comes to put some high problems on you, and then you work all your life, if you don’t take care just to be able to pay off that loan.
That is to say, never borrow money to start a business expecting that the business will generate income to pay back the borrowed money plus the interest.