What is the Need of Financial Education?

Famous author and businessman Robert T Kiyosaki always say financial education is the foundation of financial freedom. Before we discuss about the financial education, we have to know about financial freedom.

Your earning is continously growing even when you sleep and this continuous growth provides you a financial fearless life such as buying things you like, having vacation anywhere you want and no tension of pension plan in older days. Lets discuss the most important thing of financial education.

There is four basic pillar of financial education:

1. Assets and liability
2. Cashflow and capital gains
3. Debt and Taxes
4. Self financial and investment decisions

If any person having complete knowledge of these fundamentals and implements in his / her life for financial solutions, definitely in 3 to 5 years they will make big wealth. Lets discuss point no 1.

What is assets and liability?

Assests are such things which makes an earning in your pocket. Maximum people always understand in wrong ways such as “All glittering things are Gold”.

Same here, a person buys a mobile and think that he invested in an assets but in reality it is not an asset. Because it does not generates any kind of income.

Now we can say that assets are those which generates income continously.

Liability: I buy a car and I thought that WOW, I make an asset but I make a liability. How it is possible?

That’s true that I become a fool myself because I know that if I sell it after 1 month the amount of my car reduce upto 25% and this is a loss to me. Similarly my car needs ₹5,000 to ₹6,000 every month for maintainance.

Below are some misguiding point which everyone do to themselves.