This is an issue that I have had on my mind for a while and wanted to share my thoughts with you all and possibily get your perspectives on it.
I feel that the single most important problem we, as a society, face today is lack of Financial Literacy. Millions of people everyday make financial decisions. So many fail to grasp the importance of understanding the power, leverage, and potential risk involved with the use of money. Financial ignorance affects the nation at a staggering rate, from our growing middle class to our larger lower class. There is an increasing gap yearly between the have and the have not. Our government's solution over the last several decades has been to throw money at the problem in hopes that it will just magically fix itself. Tax rebate checks and lower subsidized loans are failed attempts to resolve the problem. They only camoflage the true repercussions to come. America has an reckless lack of knowledge in the use, respect, and control of money. Our society has become dependent on the government to bail them out of their financial prisons instead of educating themselves through Financial Literacy. Why is Financial Literacy so important? It brings financial security to uncertain times. It empowers users to make well thought out decisions based on knowledge, experience, and a deep understanding of leverage. Millions of people instead rely on their dream of a higher paying job, not realizing that more money only creates a future of higher taxes and increased consumer debt. This perpetuates the financial trap our society is caught in. Financial Literacy is to key to breaking the continual cycle of debt and poverty.
Sheila, thanks for the response. I want to tell you about my financial trials as well
so that you can get a true understanding of what it takes to get out of this
financial trap we all have at one time fell into. Before I do that though, let
me give you some knowledge I searched years for to found. It may bring
some light to you on how to get out of your situation. At first you may
consider it seriously out of the box thinking, but believe me when I say
that there comes a time when noone can give you a straight answer to
solve your problems. You reach a point where some out of that out of the
box thinking becomes worth receiving if it will create solutions to the
problems you face.
I want to give you some tips and insights of special knowledge that I
learned along the way. I want to also include 5 laws about money that
everyone should know yet noone tells you about because they don't know.
I will briefly descuss what Financial Literacy and Financial IQ actually
mean, and spend a short time breaking down the true concept of money. I
have a lot to say so I hope you feel like reading.
Friday, July 18th 2008 at 8:06PM
Gerald Brown Jr.
There is a saying that I heard in Italy and it forever changed me. Sometimes you have to lose your way to find a better way. I made these steps a daily part of my life to start with and then learned how to progress in the understanding of money.
1) I realized that I knew jack squat about money so I needed to seek out people that knew something.
2) Once I found that mentor I needed to shutup and listen. I had to disconnect my prejudge button, close my mouth and listen with passion and intent on what he had to say. He was out of the cycle (rat race) and I wanted out too.
3) I had to follow what he said and put it in action. This is something as a soldier which comes easy, but for most procrastinaton and inner fear keep them from shutting up and just doing it.
4) I had to track my progress. This sucked, because I now saw exactly where my money was draining out of and it made me accountable for my actions.
5) I had to create a plan. I just couldn't wish my way out of my problems or wait for someone to pat me on the back and say good job. I had to decide what direction I wanted my finances to go.
6) Learn what money is and how it really works. So many people in this world don't have a clue what money really is, what the gold standard is, or what that dollar in their pocket is really worth. I'll give a very brief lesson. Money does not exist. In other words that dollar is just a piece of paper. It only serves the purpose of legal tender, meaning in bartering terms, I promise to give you something of value later if you take this reciept now. What gives this paper power is backing of the govenment through the gold standard, which doesn't exist anymore. (will discuss later). That dollar's sole purpose is keep you from having to carry around gold bricks everytime you have to buy, or pay for something. That's it!
7) I had to learn about the power of leverage. What this means is that I had to learn that money could work for me or against me. It's not my friend or my enemy. If I used it properly it brings income in. If I abuse it then the scales tip and I takes money from me in the form of expenses and debt, bringing me to my next point.
8) If you are still with me then great, because this is what gave me hope when I started to make it a daily habit. This was actually the changing moment for me when my financial IQ grew. I learned the 5 laws of money.
Friday, July 18th 2008 at 8:12PM
Gerald Brown Jr.
It blew me away to realize that no one taught me this in school. No matter what else I learned I should have learned this way long ago.
Pay yourself first...... sounds crazy but it works. What this means is that you make a employee out of your money and have them work for you first before anybody else. You will not miss it and even if money gets tight, don't touch it and continue to do this every payday. You take 10% out of every check and place it in an account that you won't touch. This is a very difficult step but it is actually one of the first steps you need to take to gain Financial Literacy.
Learn how to Invest your money properly..... if you don't know about investments ask someone who does or find out yourself. The internet is packed with knowledge on this. If you expect a investment broker to do it for you then that your choice, make sure that he is right for your team of advisors. I feel differently. You should be accountable for your actions. The brokers and everyone else get their info from the same places and it is all free so basically you just paid for someone to find out what you could have done for free.
Protect your money..... be cautious of people who say that they can get you something for just a little investment from you. If the deal was so good, why would they tell you in the first place. Also, if you have a broke family member telling you a new deal they heard about..... RUN!!! If money is important to you then protect it by investing it under the advice of people that succeed investing their own money.
Never place your money in things you know nothing about..... this is similar to the last point but goes a little further in the sense that if you aren't familiar with something like (investing or real estate) or if the person giving you advice about an opportunity is not a skill member educated in that particular industry, don't give your money to them. It's like this, I wouldn't go to plumber and ask him about fixing holes in my roof.
Understand that money will leave you if you force it to do impossible things. I saw this in my own life everytime I purchased a new car. I expected my check to make 7 car payments, 7 insurance payments, fuel all my vehicles, buy grocerys, provide entertainment, pay medical bills, make house rent payments, and go in my savings account..... stupid. I followed the alluring advice of car dealers who really only cared about how my money would some become employees to them.
Learning and putting into practice these laws of money increased my financial understanding of how money works and help me get out of my hole many of you can relate to. I don't consider myself as anything remote to wise and I still make mistake, but the difference is now. I see my mistakes because of my improved financial IQ and understand how to recover from them and learn from them. That is the key. It's ok to make mistakes because it gives you an opportunity to better youself through them. I am a more intellegent man now because of my past failures.
Friday, July 18th 2008 at 8:14PM
Gerald Brown Jr.
For many years I continually allowed myself to be victim of that vicious cycle of working to pay off my consumer debt. I made crazy money in the Air Force doing what I love the do.... Blowing @#$* up as a Munitions Specialist (Bomb Builder). At one point in my life I even owned a total of 7 cars, driving a different one to work each day. My co-workers and supervisors would call my Black Trump, or Dion Sanders because I gettin' my shine on, flossin', bossin' and living every possible rapper and hiphop stereotype there was. I would show up to the club with my european watches and gold aviator shades with a fresh pair of Timmys. Little did most people realize, I was up to my neck in credit card debt, overdue bills, bouncing checks and still couldn't tell you what a balanced checkbook looked like.
Eventually, I can the realization that my financial behavior was killing my future when I arrived back from the desert in 2003 expecting to be sitting on a nice chunk of change (about 15 Grand in wartime money), only to find out that my wife had sold my cars and managed to put us in more debt then when I had left. That moment in my life broke me and eventually cost me my first marriage, due to both of our misuse of money and my personal anger over her selling my vehicles. It has taken 5 years and a complete mental reprograming about finances to undo the financial mistakes of my past. So when say that I truly understand where you are coming from if your finances are bad, I mean it.
So, you are asking, what got me on the right financial path and how can I get there to? I'm not gonna try to sale you a pipe dream like most people do and paint it all rosy and pink. I'm not gonna even offer books for you to read, unless you decide you want to learn how I know what I shared with you. I'm just gonna tell you what I did to stop the cycle and change my life for the better (which by reading my earlier post you kind of get the message). If you can learn to let go of all your preconceived notions and thoughts about money, you might learn how to play the game a little differently and get where you want to go. My hope, is that you have an open mind, mental fortitude and a desire to no longer keep the mindset of sheep following someone else who is in just as bad of shape financially as you. Step out and dream, research ways to make you dream work, and shut up and do it. This is how you change your life.
I got tired of constantly finding myself in debt, and had to reach my lowest level before I decided to change something, anything to get out of that hell. I realized that I was very immature and needed guidance. What I found was a lot of people that really didn't know anything themselves and were in the same situation as me, only doing better at pretending to be successful. I decided to make my own path, and I am still making it today. My goal is to make my first million in 5 years and I am well on the way. I've stumbled a few times, lost a lot of money, gained a lot of knowledge from it and pressing on. I realized that it never really mattered how much money I made, or where I worked. What mattered was my ability to control what went in my pocket and how much of it I allowed to come out. Cashflow was the key to my mental and financial awaking. The true level of Financial genius, which we all can reach, is to learn how to be like the Rich (build up enough passive income to the point were it pays your bill and expenses for you), That is the game the Rich play and I want to be apart of it. At that point you really become free.
