If you want to be rich, you don’t need good grades

Have your parents ever advised you that to get rich you need to study hard, get good grades in order to get a good job? I know I have heard this advice many times from my parents. But the fact is, getting good grades no longer guarantees that you will get rich. Even many doctors, who often get the best grades, are now struggling to make a lot of money. If you want to get rich, without needing good grades, read on.

One thing they don’t teach you in school is that your banker never asks for your report card. If you go to your bank and apply for a loan, be it for a business, property, or some other investment, then your banker will not ask for your school report card. Your school report card has very little relevance to whether or not you will get rich. There are many highly educated people who are poor and struggling to earn money. There are also some very uneducated people who are millionaires and billionaires.

Schools are developed to train people to look for work, but this alone will not make you rich. It is often the educated people with the highest paying jobs who are in the most debt and in the worst financial situation. You don’t need good grades in school to get rich, but you do need a good financial education. Many people leave school without the slightest financial education. Many go deep into school fees and spend their entire lives trying to get out of debt.

A little very simple financial education can save you a lot of time and trouble and can make you rich much faster. In fact, someone with a lot of financial education, but without much school intelligence, is much more likely to become rich than someone with a school intelligence but now financial education.

In school you are smarter if you can make more precise distinctions. Let me give you an example. If you can tell a car from a truck, then you have some intelligence. However, if you can distinguish a 1987 Ford Laser from a 1990 Ford Laser, then that is a major distinction. You can understand things in more detail and are therefore smarter. In school you will also be taught that there is often more than one meaning for a word. For example, the word libra means many different things. It can mean money, in the form of English currency, it can refer to weight, it can refer to a lost dog’s house, or it can mean hitting with a force. A word has multiple meanings.

In finance, some words have different meanings. Only in finance one meaning will make you poor and another meaning will make you rich. No meaning is right or wrong, just different, but they have very different results.

One of the most important words you will ever understand in finance is the term active. Now your banker will tell you that an asset is anything you own that has monetary value. This includes your old golf clubs, your suits, and your car. This is a correct meaning of the word active, but it will make you poor. A better understanding of the word asset is something that earns you income, whether you work or not. Simply put, if you stop working today, an asset will keep putting money in your pocket. A liability is something that takes money out of your pocket, whether you work or not.

Many people are poor because they spend their time buying assets that are liabilities. They buy things of monetary value that cost them money to own. Owning a car costs money every month. So even though, according to the bank’s definition of an asset, they are acquiring an asset, they are getting poorer. The wealthy focus on spending their time and money to acquire income-generating assets. It is these assets that make them rich, and it is the ability to define the difference between an asset and a liability that makes them financially smart.

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