It’s important that we keep on educating ourselves financially.
But why is it important to have financial education anyway? What impact does it have in our life that its important for people to take the time and effort to learn and keep on improving its financial education?
There are actually a lot of good reasons why having financial education is important but I’ll be enumerating five (5) reasons why we need to have it.
- You’re In Charge of Your Financial Well-Being – This I believe is the most important reasons why people need financial education. Your own financial well-being rests in your own hands, not your broker’s, wealth manager’s. financial adviser’s or financial planner’s. They might say that they have your best interest at heart, but at the end of the day you’re just another client to them that will give them commission when you purchase several financial tools from them. The risk is still yours, its not their money that they’re taking care of, so why do they have to do a good job making sure it keeps on growing and not lose money at all. Not all advisers, planners and brokers are like that, but most of them are. And its really hard to find someone whom you can trust. So it’s still up to you to make sure that you’re finances are well taken cared of. So take the time to build up your financial education. This will allow you to properly assess the advises that you receive and see if they fit into your overall plans. Time to take charge of your own financial well-being.
- There’s No Such Thing As Job Security Anymore – Have you ever been laid off or do you know someone who has been laid off? Not a pleasant experience isn’t it? Especially if the lay off caught you by surprise. In today’s modern world, job security no longer exist (unless you work in the Philippine government), you’re only as good as your last sale or last performance. What if you’re suddenly laid off, do you have enough money to support your needs while you look for a new job? How long will it last? What if it took you longer than you expected to find a new job? With financial education though, you’ll be able to figure out what to do if you suddenly got laid off. There are other ways to earn money than just getting a job. In fact the stuff that you’ll discover once you’re financially literate, will allow you to earn more than any job can offer. Don’t let job security fool you, be financially literate and open your mind to a wealthier possibility.
- Your Company Won’t Take Care of You After Retire – Gone are the days where you work hard all your life for a company then they’ll take care of you after you retire. Now companies have cheaper options for their employees. Robert Kiyosaki called it defined contribution plan, wherein companies just match whatever amount their employees put in their retirement plans such as 401k in the US or Social Security System (SSS) here in the Philippines. Some companies provide a lump-sum cash for their retiring employees, equivalent to the number of years working for that company, aside from the SSS. Now these plans and benefits are good, but should not be the only thing employees will rely on for their retirement. Chances are, the amount you saved up using these plans won’t be enough to cover for all of your needs when you retire. But with proper financial education, people will be able to invest properly their earnings and make sure that they won’t end up depleting their retirement account earlier than they expected.
- Making Money Work For You – You work because you need to earn money. In short you work for money. Do you think the rich work for money? Probably those who are greedy, yes. But what makes them rich anyway? Money inherited from their family? greed and corruption? Maybe, but what about those who are honest? What makes them rich? The rich has money working for them. They don’t just work hard, but they also work smart. They have money working for them so they continue to earn even when they are not working at all. They earn when they’re on vacation, they earn when they’re asleep, heck they even earn while their in the bathroom. It’s their money that’s doing all the work. Again this is because of financial intelligence. Financial intelligence allows you to invest your money in assets that earns you money. In short, money working for you.