Blog 76: Financial Literacy- What I Have Learned Thus Far.

One of the biggest misconception about money is that you need to save to build wealth. This could not be farther from the truth, as true wealth builders know that financial literacy is the key.Financial literacy is the set of knowledge and skills needed to make informed and effective decisions on all financial resources at our disposal. Saving money other than emergency funds is a practice most financial expert tend to warn against.

Instead of saving money it is wiser to invest the money and let it work for you, as it is a known fact that money can work harder for you more than you can ever work for it.

Financial literacy is the only route to financial freedom. Make no mistake, financial freedom is not necessarily about having lots of money to pull from. But the freedom to be able to do what you want, how you want despite resistance of any opposition can be an exhilarating feeling.

One of the most important lessons I learned is that you don’t get paid for the effort you put in your job or business. You get paid for the value you create or add to others.

This notion propelled me to seek avenues where I can create value to earn more, so I don’t have to worry about monthly bills and have more than enough disposable income.

More disposable income does not mean money to burn. What financial literacy will teach you is how to curtail expenses and invest habitually.

Why investing over saving?

If your money is in an account where you can see it, chances are reasons will arise to spend it.

So if the money is not for emergency or contingency, invest immediately in liquid or illiquid asset.

The most important edge a financial literate has is the ability to manage liabilities (debt). There is a difference between someone who buys a valuable asset using debt and someone who consumes something using debt.

There’s nothing worse off than paying capital and interests on items you have already consumed. It is also called trying to get out from behind, the fastest way stay poor.

Your thought.