In your pursuit of creating wealth, it’s important to realize the importance of education.
There are 3 important types of education:
- The first type of education is a very important and basic education necessary for survival today called Scholastic Education. Scholastic education which is taught in elementary, middle and high schools teaches students how to read, write, do arithmetic, etc.
- The second type of education is a professional or specialized education. This education is necessary for professional success to learn the skills taught at a University, Business school, trade school, medical school, law school, etc to become a doctor, engineer, lawyer, professor, etc.
- But it’s the 3rd type of education that most people are not getting which is costing them the most money and that’s Financial Education (money managing skills like how to balance a checkbook; understanding basic accounting principles, to distinguish – and be able to define – assets from liabilities, good debt from bad debt, linear income from passive income, etc). This education unfortunately is not really taught in schools (they don’t even teach simple personal finance skills like how to balance a checkbook); most people learn their financial skills either by trial and error (an expensive and often painful way to learn) or from what money skills they picked up from their parents, most of whom have bad money habits themselves (because they never learned, and so the cycle perpetuates). In fact to make matters worse, many college students learn their (bad) money habits from all the credit card offers and incentives they receive on campus, enticing them to sign up for and use credit cards for bad debt – I should know, I’m speaking from personal experience on this one!
(Side note: this is another difference that distinguishes the wealthy from everyone else – they do pass down these critical skills and lessons about money and finance to their kids. Is it any wonder why the rich get richer?)
Too many people are never taught this when they leave school and have no idea what a financial statement even is and usually only come to realize it’s importance when it’s too late in life, when they want to stop working but can’t afford to, once they’ve lost their job, lost their retirement, etc. And unfortunately, they have to learn the hard way usually because their financial statement is in bad shape!