Why You Should Know Financial Education In 2020

Even after spending more than 15 years in schools and colleges and still financial education is new to you. Then your time is wasted. That's the problem with our education system.

What Is Financial Education?

Financial literacy is the set of financial management, personal finance, financial IQ and ability to be able to create assets.

Key Notes -

  • what is Financial Education

  • How to develop financial IQ.

  • How to financially manage things

  • Need to create assets

  • How mastering personal finance can change your livelihood

  • Investing

  • Importance of Emergency fund and savings

Financial literacy means an ability to grow your assets, its like retiring early and it doesn't matter you work or not work it means barring unforeseen cataclysmic changes. Work or not work but your wealth grows automatically because your asset are large enough to grow by themselves. Its like planting a tree, you water it for years and than one day it doesn't need you anymore. Its roots have gone deep enough and the tree provides you shade for enjoyment. Being financially educated gives you a vision greater than anything, assets creation becomes your only goal and you can enjoy the process. 

People suffer because they lack financial literacy, they work all their life, tries to do their job even if they don't like it. They take loans to buy house, car, and for their children's education, and end up setting a trap for the rest of their life and they teaches the same to their children to study as hard as they can and find a safe and secure job. And their children end up the same and this is called the Rat Trap. 

Expenses and liabilities increases as the income increases because our wants outgrows our income. But appropriate skill set and indulging yourself in financial skills development changes all your problems into opportunities to grow big by decreasing your liability and increasing your assets.

How To Be Financially Literate?

There are lot of methods to learn new things but to begin with you need to understand the base first

How the Financial Education system works

Financial literacy makes a person to identify opportunities, understand the risk factors, expands his vision, making investment, differentiation between a liability and an asset, generating of other income sources, and stop being a bottle neck. These are the fundamentals you should master to start your boss free life. These skills set develop a IQ to understand your surrounding and how actually everything works.

How to dominate the field

To be able to master the financial knowledge, you need to makes right decision and focus on the long term goal not the instant pleasure scheme. For example you have given a choice a) to get Rs. 15,00,000 instantly or b) to get Rs. 1 and doubling it every next day. Have you decided your answerRs. 15,00,000 seems a decent amount, right?If you think the same than you need to learn the power of compounding. If you have calculated by now, you can get Rs. 53,68,70,912 at the end of the month in a single day. That is correct Rs.1 can make you Rs. 53,68,70,912 if you know who to play the compounding game and isn't that amazing.

This is called compounding and you need to focus on long term profit even if it starts with zero, you never know when you end up being the richest guy in your family.

Let your money make you more money

Making money using money is not that hard when you know the game. When you rent your house to someone, you are just not letting someone use your property but charging a handsome amount for using it. It really sounds better if you understand how this can give you a better money than your 9 to 5 job but it also needs patience. After renting your house now you decided to make another house with more rooms or get a house on lease and rent it to another tenant. The amount you took from the bank as a loan to buy or lease a house soon will be paid back with the money you are making as side income. But first you need to understand the difference between an investment and a liability. When you buy a house on loan you think it as your greatest Investment but it is actually not. You have to pay the loan back with interest, you now have expenses of electricity, water, maintenance of the house and other expense, and you cannot deny to pay these expenses. 

The house you bought now becomes a liability which drains a lot of money out of your pocket. Whereas, doing the same but renting it to people as tenants for use soon becomes your investment as you are charging money for usage and you can pay back the money to the bank with ease and quick. And soon you realize that you have no more money left to pay back and you start making profit and now you can repeat the process for better. Investments sure requires capital and your efforts but once it starts working on its own it generates money on its own.

Benefits Of Being Financially Educated.


  • Being financially literate makes you an Elephant in the room, you now know and understand financial management.
  • You now manage your time properly, your investments are working for you.
  • You can now have better time with family.
  • You can now teach your kids and family the real world knowledge.
  • You involves more time in learning.
  • You now no need to worry in time of inflation or a pandemic.
  • You have edge over your liabilities.
  • You can identify opportunities to grow even more as growing is an aspect of life.

Risk Management

Risk management is the most important of skills which is now in so much demand and still will be more than a century. Everyone, a human or a business needs risk management, as in the year 2020 we all got the taste of what it is when we are not prepared for the worst. Risk management is the ability to work under peer pressure, handling the situation, analysing and taking measures to control the risk. Every business go through hard times and risks but who are able to overcome risk factor, continue to survive longer.


Investing is the top most priority of a person who tries to make a fortune. You must master the or learn and be a fundamental follower of investing. It doesn't take much to develop a understanding of Investing Fundamental. 

To better understand about how share market works follow http://indified.in/स्टॉक-मार्केट-कैसे-काम-कर/ and to understand how to start Investing follow What is trading and how it makes money. Develop a habit of reading, searching for topics to learn more for better.

Why Savings And Emergency Fund Should Be Separate?

You must understand that savings and emergency fund are two different things and it is important to have both. Savings will help you in time of your needs but what happens when you have spent your all savings and now you need money so urgently. This is where emergency fund steps in these types of savings are made for special events. They works as your insurance and they are proven to be a lifesaver. You need to prioritize you needs and what you desire because spending money without thinking is a disaster and it will hit you hard in the time when you just can't bear the affect.

 That is why prioritizing your needs are so important so that you can be financially free, have better understanding of expenses and can relay only on yourself for your support.

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