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Tuesday, January 31, 2023

Why Financial Literacy Is too Important? – Analysis, Definition and Review | Finnoexpert Special

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 What Is Meant By Financial Literacy?

Financial Literacy is understand as simple as like you are a driver and you drive a car before driving a car you need to know about that car and then you drive slowly-slowly similarly financial literacy is a skill in which you should need to know about management, investing, budgeting, planning this skill improves you and your future and also helps to achieve your dreams.

If you are read our rich dad poor dad book summary  then you understand what is financial literacy. The Difference Between Assets and liabilities is also plays important role in financial literacy. Understanding Assets and Liabilities helps to improve your planning regards your balance sheet. So, Now we discuss about Assets and liabilities. 

A) Assets:

Your Home, Car, Bike are Assets?

The Answer of the above question is NO, Because Main definition of the Asset is the object or matter which act with respect to your Income those matter are comes in the phase of Asset or is called as Assets.

The Car, bike, home, ppe ( property plant and equipment ) , Inventories e.t.c this assets but this by this thing you can’t generate more money or you can’t even generate consistently money or income by this things that’s why the above things are assets but completely a part of Asset. Asset in a term which is helps to improve the health of company and investors. Assets plays important role in companies Reports. Assets are the development of company means in other words assets are soul of the particular company or even a whole global economy. So, everyone shout need to focus to generate more and more assets side for your future growth and Achieve your dreams.

In Rich Dad Poor Dad Book there is The Author of this book is Mr. Robert Kiyosaki says that There is a 3 types of category in our society.

1) Poor Class:

Poor Class doesn’t means that They are poor by money the most of the people or %of people are poor by mentality and this type of mentality make they poor. Poor man can’t stop reasons because they know that we can’t do anything for become a rich and this kind of mentality make they more poor.

In rich dad poor dad book Mr. Robert says the poor category peoples are have a cash flow like this:

  1. They do Expenditure.
  2. do few savings
  3. if possible then do investment.
  4. zero assets

The above cash flow shows the how poor peoples pass their life by doing the loss of money we say. So, Not only poor peoples but also middle class is also going to be a poor by this cash flow. Poor peoples maximum avoid to investment because they think that investment is very risky and even chances to loose our whole money in share market by doing investment. Yes their is high chances to loose money in share market but second parameter is that their is also a chances to become a rich by gaining a knowledge about financing.

2) Middle Class:

Normally their is most of the people in our country is in the middle class category. The middle class man survive hardly in their life. The middle class man can do too hard suffer for survive but not than poor.

Middle class man also have cash flow in which we study how middle class man are survive for their life. Most of the middle class family are depend upon the government because government is also depend upon the middle class man.

In this world the majority of the middle class family is very high. So Now we discuss about why middle man are have low mentality.

  1. Expenditure
  2. take liabilities 
  3. savings 
  4. little bit investment…if possible 

This is the middle class family cash flow in which first they complete their needs or wants through their monthly income or salary. 

After ending the quota of salary or income they they decide to by liabilities and after buying loan they try to hardly return that loan and at the end of life this middle man are suffer for complete pays for their loan with interest.

And from which if few money left then they save for investment or next months expenditure. 

So, Middle man are suffer for life time and they don’t take enough time for family and enjoy their life.

Why Financial Literacy Is too Important? - Analysis, Definition and Review | Finnoexpert Special

Conclusion From This 2 Scenarios:

Poor or Middle class family both are the suffer from same situation and at this time they need to aware about financial education and even management which helps to become a rich.

So, Why rich peoples are going more rich in this world or in country because they know about financial education and they aware about that so, that’s why they focus on management and absolutely they finally achieve it.

3) Rich Class:

So, Now we understand the cash flow of the rich family that how they become a rich and how they manage their money. From Rich dad poor dad.

  1. Rich peoples are firstly Do Investment.
  2. Build Assets like real estate, stocks, bonds, intellectual e.t.c.
  3. Expenses as per need.
  4. Rich peoples don’t buy liabilities.
  5. they only build assets.

From the above points we studied that rich peoples focus on building that assets and they never buy liabilities or they even do little bit expenses that what they wants.

Rich Peoples do not waste money because warren buffete says that “if you buy a thing that you doesn’t want they you should need to loose the thing that you want”.

So, Rich people are have a ‘x’ factor and that ‘x’ factor make they more and more rich.

The ‘x’ factor is their mentality and their mentality make they perfect for become a rich.

B) Liabilities: 

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“Liabilities are like salt if you take it on the basis of your balance sheet then they give you a better test”.

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Liabilities is also know as loan. Loan that banks give us for short period and banks give you a dead line you need to repay that loan with respect to your time period and give with Principal Value + Interest.

In Balance sheet their are one is a asset side and second is a liabilities side in which you should try to follow assets but for person or group of person who suffer in very critical condition and at that time you need to take a loan but you should need to take a loan on your risk factor because most of the peoples are take a loan but after time to repay that loan people don’t able to repay that loan due to the lack of knowledge about management and financing.

Liabilities are helps to complete your achievements not a dreams because loan that you take for your development, improvement of the company or your personal growth.

USA vs INDIA In Financial Literacy:

“In USA their 50% of peoples are doing investment and in India there is only Near about 04%

Why This Happened?

There is too many parameter in which Politics, Point of View, Education, Slum areas e.t.c from which we should try hardly Avoid Politics Because in India their to many political parties and this are only for show off.

In India their Indian Parents are don’t want to invest in share market and that’t why the children are also follows parents so, they also don’t invest in share market and afterward the whole community says that share market is a gambling.

The Every Indian should need to Invest in Share Market And if it happen then India Compete with USA By Economy and The Positive side is that the India is one of the country in the world which have Fastest Growth rate economy.

The India Is a Emerging Market so, International level the global countries are heavily invest In Indian Share Market Because they know that the future of India is Very Bright.

If the global countries are accept that the future of Indian Economy is Very Bright Why we can’t do investment in our own share market?

Here I am Samarth Pophale CEO of Finnoexpert. We have a dream that we educate peoples of our India by Financially and If you also want to be a part of Finnoexpert then you only need to Subscribe the our finnoexpert channel on You Tube and Also Follow Us on Instagram And other social media platforms.

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Suggestion:

If you really want to become a rich then please study as much as possible on financing because this thing only in the world that make you rich and fortune. 

Try to watch youtube videos on financing read our blogpost day by day and improve your knowledge about finance. 

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So, If you love to read our blog post then Please Share as much as possible in your Positive Circle and Don’t Forget to Comment Below the section.

So, we get motivated and make next blog post more powerfully.

THANK YOU SO MUCH!

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