Hey guys most of the people always talk about how to earn money or being rich overnight.They often dreamt of having a big bungalow cars fancy facilities and amenities for them and always begging all of it from god and always being waiting rather of doing anything about it they always keeping their Destiney reason for it.
According to them they doesn’t have good enough fortune to have all, that they want .But sadly they have misconceptions about getting rich. People usually reckon that being rich is chance of luck like to born in rich family is luck or getting huge returns on share market etc. Reality is far away from all the misconceptions and presetted thinking . we name it as the box mentality ,so lets discuss the main assumptions which we have, and that should be neglected from our life.
Some the wrong mentality is that “to be rich you need to be lucky” and also thinking like “to have huge income you need huge scale business”, And ”to have a huge business you need huge capital”.
Now lets jumping to the reality of being rich and wealthy, and analyse the basic things regarding finance or money, We call it financial literacy.
So What is financial literacy and what are the benefits of it and why every person must have deep knowledge of it There are two types of source of income that is active source of income and passive source of income.
First lets get in depth of active source of income the typical active sources are like a 9 to 5 job a or doing something of your own like selling fast food making it by your self. The Source of income like this will give you benefits only till they are active ,that means they will not benefits you ,once you stop working your payment will also stop.
However the passive source of income is completely out of this form, it allows you to earn even when you are having a bed rest. surprisingly in spite of being really good source or method to earn money the passive source of income is confined to very less peoples because of its nonconventionality. People are not familiar with it.
As being aware about the types of incomes lets get to another very important terms that matters crucially in someone life and they such as
Assets is something which gives you Money passively without requiring any expanses ,except one time investment, asset is something that can bring money to your account without taking much of money expenses.
On the other hand Liabilities are the things that consumes your money until you have it throughout your life, like its purchasing cost, maintenance cost, repairing cost and all the expenditure requirements regarding that liability for instance suppose you bought a bike first it consumes a lot of fuel, second it requires maintenance cost like washing polishing servicing etc. It does not give you any return amount back to you . The most surprising fact is 83.7 percent of our Indian population or people spends 80 percent of their salary on liabilities, which they have earned in their whole job career, also the scared to invest on assets with the fear of loosing money . That’s shocking isn’t it ,actually sad but true .
Now lets talk about what they should do instead of wasting their hard earned money to multiply it or to become rich or to have financial freedom.
So understanding these basic pillars of financial literacy is not enough one have to clarify more of the structure of money flow of himself or how his money is going wasted .
So usually the peoples do this to their money.
This is the real flow of cash or money that takes place and cause the huge difference between a poor person and a rich person . According to great business men and investors the brilliant policy to have great amount of money or to earn money fast is to save money before spending that means whenever you got your income in your hand the very next thing every smart person should do is to save almost 20 to 40 percent of the whole income you have, means you should forget about that money on time of spending money that you have more money.
What it will do is that you will have that money as backup for the future without being fear of expenditures.
Second thing is every person should invest their money to save it..confused ? how money can be saved by investing all of it ? to understand this lets get deep into this suppose the money you usually put into the bank will never benefits you except some amount of the interest, that’s all you will get. But the money is there for long time will never be double or even become 1.5 times of itself and in the end it will be spend whole at a stage .
So investment should be done with that money “you should invest 10 percent of your income said Benjamin graham in his book “The Intelligent Investor” a really must read book for every novice person to the field of investing and the
This is whole overview about the investment which is a type of an assets ,the financial literacy is .now lets conclude what I wants convey through this article and what is the objective of financial literacy is
To spread awareness educate consumers about the financial products or assets like bonds, shares, debts, mutual funds and real estates etc.
At last live your life at its best work smartly invest more in your skills and knowledge also not only your money even in your hard work.
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