The real pandemic right now is Financial Illiteracy and how it is serving the system by taking the power from the people.
The school system isn't designed to make competent people, it is designed to make competent workers.
As such, people are reaching the adult stage with no idea of how to handle money or even basic taxes.
This is leading to the gap between rich and poor widening while decreasing middle-class families, which are the backbone of every economy.
Trust me, if you're one of the financial educated and you want to succeed, you need to have a strong middle class in the economy.
It is urgent for people to take control of their own financial education. People need to see that handling their finances is the most important thing they can learn - I'd take financial knowledge over financial gains any time of the week...
Throughout this article, we're going to go over some common problems when it comes to this topic, including inflation, taxes, investments, assets, and so on...
Young Adults Don't Know About Inflation:
As a part-time job and to ensure I always enrich my resumé and climb the social hierarchy, I am a University Professor (a cool side-gig to have with countless benefits).
One of the benefits is that I am in tune with how young adults see life throughout the years.
Inflation is a VERY ignored subject among the 18-30 age group, and this is worrying.
Most people in my classes hear their first explanation of inflation from me and they always say in a shocked and surprised Pikachu face:
Professor, that's theft!!
Yeah, inflation is system-approved theft, and people don't know about it.
Even a substantial number of older adults have no clue what inflation is about.
This is something the system doesn't want to fix, of course, but it is a core variable when considering investments and the way you manage your money.
I never thought it'd be that bad until I started teaching... now I just assume that NOBODY in a class of hundreds knows what Inflation is - and that's sad!
People Don't Know Money is Transferred, Not Made:
People in general always say "Making Money", and they actually think about it this way.
They believe money is created, not transferred.
This may sound dumb for many of you - but believe me, it is the rule.
Most people have NO IDEA money is only transferred, never "made".
For someone to "make money", someone else needs to lose it. For countries to make money, other countries need to lose it - and the system works like this from top to bottom.
Capital is never created from thin air, and when money is "made" through inflationary tactics, it is only being transferred from everyone else to those who "print" it.
This is another variable people should be taught in school.
People Don't Know to Invest in Assets Rather Than Liabilities:
I don't know if you ever read "Rich Dad, Poor Dad" by Robert Kyosaki.
Cliché as that book may be, it does really drill down on this:
Buy Assets;
Avoid Liabilities;
When people are getting more money out of their job, they end up raising their standards of living.
Every businessman and financial expert can tell you one of the most powerful ways to get rich is to constantly live below your means.
With fewer liabilities, by living below your means, you'll have more liquidity and savings, so you can take advantage of opportunities when they arise and so you can invest more each and every month.
Your portfolio will grow nicely if you have more liquidity available at the end of the month.
People Don't Know Even Basic Taxes:
I don't know how it is in your country, but right here in my country, there are a lot of useless subjects kids have to go to these days.
It would be nice for the school system to start teaching kids about financial literacy and, above all, taxes.
If more people knew about taxes, they'd of course be increasingly aware of their state's taxing policies, which can be bad for many countries, including my own where the tax system prohibits investment.
This is why everyone says it'd be great for kids to learn taxes, yet no government no matter the party implements this.
It sucks!
When these kids grow up, they'll be surprised by taxes and most of them will have to pay fines and whatnot for missing their schedules, messing up their forms, or failing to hire someone who understands taxes in the first place.
My Goal as a Father: My Kids Will Learn Financial Literacy Since Birth
As a father, I have a goal in mind when it comes to this.
I will give my kids the tools they need to succeed in life, the tools I wish I had.
If I knew more about financial topics and money before I became an adult myself, then I'd be set already.
I firmly believe those who learn money since birth has their lives cut out for them and can do whatever they set their eyes to - this is how powerful financial and economic knowledge is.
A Micro and Macro Economy Crash Course: Keynes vs Hayek
If you want to learn a lot about micro and macro economy from a cool and simple video, watch the clip above.
This is a great way to learn about two distinct Financial and Economical Schools, the Keynesian and the Austrian Schools of economics.
If you don't know much about how economies work or want to polish that knowledge up a bit, this video is a great tool to get more knowledge in less time.
If you already know about economics, watch it all the same - it is definitely worth it.
Also, here's the second part if you loved the part above:
This inspired me for an article I'm writing tomorrow, telling you about how I grew up with no clue of how economics worked and reached adulthood without knowing most of these things.
That's right, my path getting here wasn't easy.
Cheers!
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I'm impressed. Just went through all your posts and one thing I noticed is that there's always one or two things to learn from each and everyone of the..
Keep it up!!!