Did your parents ever give you the advice that to become rich, they need to study hard and get good grades so they can get a good job? I know I have heard this advice on many occasions from my parents. But the fact is that getting good grades no longer ensures that you will become wealthy. Even many doctors, who are often the ones with the best grades, are now struggling to earn a lot of money. If you want to get rich without needing good grades, then read on.
They don’t teach you in school because your banker never asks for your report card. If you go to your bank and ask for a loan, either a business, property, or some other investment, then your banker is not going to ask for your school report card. Your school report card has very little relevance on whether or not you will become rich. Many highly educated people are poor and struggling for money. Some very uneducated people are millionaires and billionaires.
Schools are developed to train people to look for a job, but this alone will not make you rich. Often it is the educated people with the highest paying jobs that have the most debt and are in the worst spot financially. You don’t need good grades in school to become rich, but you do need a good financial education. A lot of people leave school without the slightest financial education. Many leave deeply in debt from school fees, and they spend their entire lives trying to get out of debt.
Some elementary financial education can save you a lot of time and trouble and make you rich quickly. In fact, someone with a lot of financial education, but not many school smarts, is much more likely to become rich than someone with school smarts but now financial education.
In school, you are more intelligent if you can make finer distinctions. Let me give you an example. If you can distinguish a car from a truck, then you have some intelligence. However, if you can distinguish a 1987 Ford Laser from a 1990 Ford Laser, that is a greater distinction.
You can understand things in finer detail and are therefore more intelligent. In school, you will also be taught that there is often more than one meaning to a word. For example, the word pound means many different things. It can mean money, in the form of English currency, it can refer to weight, it can refer to lost dogs home, or it can mean to hit with force. One word has multiple meanings.
In finance, some words have different meanings. Only in finance, one meaning will make you poor, and another meaning will make you rich. Neither meaning is right or wrong, just different, but they have very different outcomes.
One of the most important words you will ever understand in finance is the term asset. Now your banker will tell you an asset is anything you own that is of monetary value. This includes your old golf clubs, your suits, and your car. This is one correct meaning of the word asset, but it will make you poor. A better understanding of the word asset generates you an income whether you work or not. To put it simply, if you stop working today, an asset will continue to put money into your pocket. A liability is something that takes money out of your pocket whether you work or not.
A lot of people are poor because they spend their time buying assets that are liabilities. They buy things of monetary value that cost them money to own. A car costs money to own every month. So, although they are acquiring an asset according to the bank’s definition of an asset, they are becoming poorer. Rich people focus on spending their time and money to acquire assets that generate their income. These assets make them rich, and it is the ability to define the difference between an asset and a liability that makes them financially intelligent.