How To Make Money From Your Money – According to the National Endowment for Financial Education, about 70% of people who win or gain a lot of profits (e.g., court settlement, insurance claims, etc.) go bankrupt within a few years. This should come as no surprise, as financial literacy is widely inherited with goodness.
Chances are these lottery winners have never received proper financial education from their parents to manage money. In fact, it is estimated that half of the 120 million Americans or adults do not practice financially responsibly.
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The burden is on parents to teach their children financial literacy because they will not learn it elsewhere. Most schools do not teach financial literacy. Financial literacy is not one of the four core subjects, although it should be. It seems that financial literacy is very important in developing adults with specific skills such as the four core subjects of mathematics, science, art, English and history / social studies.
Financial institutions do not focus on teaching children financial literacy. With little outside support, children raised in financially ill-fated families face a fierce battle.
The good news is that the cycle of poor financial literacy can be broken just as the cycle of poverty can be broken in such a way Each – through education. When I think of breaking through the cycle of poverty, I think of “Hillbilly Elegy: A Memoir of a Family and Culture in Crisis,” a 2016 memoir by J. D. Vance adapted into a 2020 film directed by Ron Howard.
In his autobiography, Vance tells the inspiring story of his upbringing in Appalachia and his escape from the family legacy of poverty, dysfunction, and drug use through hard work and dedication. Education. Driven by his tenacious but endearing grandmother, Vance left Middletown, Ohio, to attend Ohio State University and Yale Law School.
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After law school, he worked as a principal in an investment firm called Mithril Capital Management, owned by PayPal co-founder and billionaire Peter Thiel. In 2020, Vance raised $ 93 million for Narya Capital, his own Midwestern investment fund. Without financial knowledge, Vance was able to break the cycle of poverty of his family through education and perseverance.
For many Americans, financial disaster is just a paycheck. As of 2017, 40% of Americans surveyed do not have enough cash on hand to cover $ 400 in emergencies, according to the Federal Reserve. Many of those respondents said they would cover their expenses with a credit card or borrow from friends or family. How did 40% of Americans get here and how did they get out of there?
For me, the first step to financial literacy is understanding money. For many Americans, money is just a means to an end. If you want something, you give it money. If you want money, you provide your services to the employer in exchange for money. If you want a lot of things, you work long hours or get another job. The problem is, many people continue to expand their package of needs and want to match their income – spending everything they do. Some even spend more than they earn by taking out consumer debt.
The problem with how unskilled financials treat money is by looking at it through the only mirror they know: as a consumer. On the other hand, those with financial knowledge see money through the eyes of the manufacturer. For consumers, money is a commodity – good only for the purchase of goods. For those who have the mindset of making money, it is a productive asset that can be put to work to earn Give them money while sleeping.
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If you had a choice between a rooster and a hen, which one would you choose? Your chickens come with a monthly food supply, but after that you will be responsible for their food. If you are like most kids, you will choose the rooster because it looks and sounds cool. Who wants a normal old hen that just rings?
Children who raise roosters face common problems. They do not keep track of the amount of food they are feeding the chickens and grilling them through the initial monthly supply. The chicken owner begins to panic. Unless they find a way to find more food, they will have to hand over their chickens to someone who can afford to raise them. Chickens now control their lives as they earn extra money to buy food. They have three options:
Kids who choose hens choose them for a specific reason: hens lay eggs that can be sold to neighbors, money can be used to buy food. And after taking care of the hens, the young owners have little money. What do these kids do with the extra money? They do not just go out and spend it. No, they use the money to buy more hens. They can even diversify the streets and buy dairy cows for their milk. Eventually, the hen owner will be able to hire other children to look after the hens, leaving free time to do whatever they want.
. Once you generate enough passive income to meet your financial needs, you will no longer have to rely on your daily work to fulfill your financial obligations. You will no longer depend on salary. This is what people consider financial independence. What is missing in this whole discussion is that there is more than one way to speed up the timeline for achievement. Financial freedom:
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At the end of the day, what do I think is the most important habit someone can adapt to break the cycle of bad financial decisions?
So which one do you choose – chicken or hen? Stop working for your money and instead let your money work for you the way listed above. In this way, you will be able to turn your savings into passive income, thinking like a producer rather than a consumer.
Note by: These are comments written by the author and do not necessarily represent the opinion of.
Logan Freeman is the Founder and Managing Member of Live Free Investments and Co-Founder of FTW Investments. Logan ove … Read More If you have saved some money by spending less than you earn, you may be wondering what to do with it.
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However, you can also increase your wealth through 4 basic ways to achieve a cashback.
But with good credit, you might find exactly what you need.
If you have some extra money, do some research on how you might be able to advance your career and make more money.
If you invest $ 20,000 to earn just an additional $ 5,000 a year for the next 30 years, that is an extra $ 150,000.
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But if you have the opportunity, at least you should research how much it costs and how much you can earn in the future.
You will need some money to cover your basic expenses until you can make the business profitable.
While it is more risky to start your own business than to learn a new skill, the returns are also likely to be greater.
While people may not set up a business, investing in real estate is a great way to start your own business.
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There are decent people who simply build wealth by buying houses and renting them out.
It is also historically credible for providing a strong average return of about 7-10% annually before inflation.
All you have to do is open an account at a brokerage firm and buy some stock.
Even better, there are tax-benefit accounts and plans, such as 401 (k) plans or individual retirement accounts.
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Importantly, if a company increases its revenue and net income, or even people think it is worth more, your stock value will be worth it.
You can also get dividends from the company, which is usually a cash payment from the company.
The biggest difference is that you can not just go and sell your shares in the company as you would in the public market.
In addition, if you are investing in a new business, there may be a lot of risk associated with investing.
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However, there are many companies and even whole groups of companies that you can invest in today.
Unless the debt is short-term, the company will pay the interest within one year.
You can continue and choose the term of the debt investment, such as 6 months, 1 year or longer.
For short-term debt, one investor pays a larger amount, such as a $ 99.50 payment, and earns $ 100 in a few weeks.
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And debt to city and state governments may qualify for federal and local tax exemptions.
Your lending is likely to be less risky than investing in your stock or startup.
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