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:
- Assets and liability
- Cashflow and capital gains
- Debt and Taxes
- 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.
I hope you will understand what I wanted to say with this.
Buy always the things of need and not focus on EMI purchase because it in longer EMI you need to pay extra interest which is a loss for you.
Try to buy the mobile of same features such as in 1 lakhs mobile because if you buy IPHONE you get privacy and good show off but burden of EMI comes on you and this does not makes any income but it makes liabilities. It is called Burden of Pay to other or Earn for Other entire life.
So try to focus and take loan only for the purpose of Business development because your business makes money for you in a long period.
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