WHY DO WE MUST LEARN FINANCIAL LITERACY

It's not how much money you make.

It's how much money you keep.

    Talking about money is always interesting rather than books or any social activity. People tend to find the fastest way to gain money; therefore, they can be rich and buy anything they want. Most people must realize it's different from how much money you make. It's how much money you keep. We've all heard many stories of poor lottery winners, suddenly rich and then poor again. They win millions yet are soon back where they started, or stories about actress and professional athletes earning millions at 24 but sleeping under a bridge 10 years later. These causes are because they think money will solve problems. However, they will have a rough ride. Remember, "intelligence solves problems and produces money. Money without financial intelligence is money soon gone." so here are two reasons why we must be financially literate?

1. If you want to be rich, you need to be financially literate

    Accounting is the most confusing and dull subject in schools; meanwhile, if you want to be profitable long-term, It could be the most crucial subject. According to Rich Dad and Poor Dad, the author mentions that rich people acquire assets. The poor and middle class accept liabilities that they think are assets. What it means? It means that many people are starting to work to pay their mortgage, buy a house or even buy new cars. However, when they buy those things, they are created to think that they are rich and have a lot of assets, but actually, they're not. They just spend their money to pay taxes and dig themselves into a hole because every time they make transactions, they pay taxes for buildings or the stuff they purchase.

    What defines an asset are not words but numbers; if you can not read the numbers, you can not tell a purchase from a hole in the ground. In Accounting, it's not the numbers, but the numbers are telling you. It's just like words. It's not the words but the story the words are telling you.

2. To know the difference between an asset and a liability 

    Most people agree their houses, car, and jewelry are their most significant assets. Therefore they will spend their entire life making money and paying for their mortgages. I am not telling you to not buy a house, no, I know the place is essential for us to live, but do you want to work for your home till the rest of your life? of course not, right? You are not going to enjoy your life when you still have to pay the debt in elderly age, and you are not going to own your salary when you have to keep 70% of your credit, meanwhile in another side your wife, child, and other necessary things are waiting for you. It will be so stressful enough since all your problem has yet to solve. 

    But here are the things you should listen to. An asset puts money in your pocket. A liability takes money out of your pocket. This is so simple; remember, every time you buy some stuff just because they are cute, that is a liability. It takes your money out, but those things do not bounce back the money for you; they are optional, but you buy them for unlogical reasons. You should not spend your money on something useless; invest it in an asset that will make you rich. Rather than purchasing cute stuff and paying for a mortgage, investing an investment will be better than buying your dream house through the income that you get. You will gain so much money by investing an asset that you could buy a house from the cash flow you get on it. Here's the list of assets you could buy, e.g., real estate, stocks, bonds, notes, and intellectual property.

Knowing how important it is to be financially literate will help you a lot to escape the trap of the rat race. 

Alright, everyone, is it clear enough? If you still need clarification, feel free to ask and give a comment below. Thanks for reading !! :D