Most people have no financial education. The saying “the rich get richer and the poor get poorer” is basically a statement about this situation. Our education system is not setup to give people a good financial education. Those who get it, normally get it from their parents.
Like any education, it isn’t likely to happen by accident. If you want a financial education you need to actively pursue it. The first thing you can do is make sure you are spending time with people who you admire financially. This doesn’t just mean people who have a lot of money. You need to spend time with people who think about money the way you want to think. For example, if all of your current friends have maxed out credit cards and have the highest mortgage they can afford, you should probably try to spend at least some time with people who live below their means. You want the mentality of savings to rub off on you–not the mentality of spending. Also you need to hang out with people who don’t consider it rude to talk about financial matters. This doesn’t mean people who brag about their finances, but there are some people who like to talk about IRA’s, stocks, and taxes the same way other people like to talk about sports teams. Many people without a financial education either consider it rude to talk about anything related to finances or at the other extreme try to brag about their finances to everyone.
Another important part of a financial education is reading. Spending 15 to 30 minutes per day going over a book from your library can put you miles ahead of the average person. You should also spend time reading the financial section of the news paper or a business paper like the Wall Street Journal. If you don’t have much of a financial back ground, you may find a lot of terms that you don’t understand. Make note of these terms and look them up on the internet or at the library so you can understand what you are reading. Don’t get discouraged if the langauge and terminology seems foreign to you at first. It it just a matter of learning the financial language.
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