Introduction The following executive summary is a hybrid of the investments article, “How to start out investing right” and the four of the six major lessons in the best selling personal finance book, “Rich Dad, Poor Dad.” Two different resources that highlight the importance of education and personal financial independence through life investments. We can agree that today’s society possess numerous amounts of resources to become self-employed and financially independent. However, not everybody takes advantage of such resources and fail to become financially independent due to fear of the unknown and lack of knowledge. Therefore, the following document will highlight the overarching path to becoming financially knowledgeable by learning how …show more content…
Unfortunately, too many times to count; situations that are not too far from us. How many of us have a sibling, a cousin, an aunt, an uncle, or even parents that work extensive shifts, but barely make enough money to make ends meet? The truth is that the statistics of people who are unable to meet payment deadlines continue to increase with time; while the minimum wages increase, people also increase their expenditures, so there is never really a benefit in earning more money, as society tends to spend more. Therefore, Robert T. Kiyosaki, author of “Rich Dad, Poor Dad,” invites us to start investing in our financial education; thus, opening the doors for financial independence through four of its six major lessons: “The Rich don’t work for money,” “The importance of financial literacy,” “The rich invent money,” and “Work to learn, Don’t work for money.” Similarly, “How to start out investing right,” promotes education and provide us with seven easy steps to start investing in the 21st century: “Choose the proper mix of assets,” “Start out with mutual funds,” “Educate yourself,” “find a knowledgeable and trustworthy broker,” “Adopt a Scrooge-like approach toward fund expenses,” “Go for consistency,” and most importantly “Never invest in anything you don 't …show more content…
Therefore, he emphasized on “The importance of financial literacy,” meaning that people needs to learn how to make money work for them. Although the idea sounds complex, it is very simple; Kiyosaki is telling us to control our assets and liabilities by increasing our investment and decreasing our expenditures. Simple math, manage your income, so that inflows are always greater than outflows; thus, never spending the money you don’t have. Further, he tells us that “The Rich don’t work for money,” which is the same concept given through the prospective of the wealthy. The rich don’t work for money, they “work to learn,” thus, always acquiring knowledge that can assist them in a future project or business initiative. Consequentially, “The rich invent money,” meaning that they don’t wait on a job to generate the revenue, they developed business strategies to open their own business and/or invest in real state or stocks that guarantees them a constant source of revenue. Similarly, “How to start our investing right,: highlights the importance of income generating strategies such as the purchase of mutual funds, CDs, stock, and/or bonds. Already overwhelmed? No problem, the article breaks it down for us in seven easy steps that can help us get start investing. First, “choose the proper mix of assets to reach your financial goals before buying any investment.” Everybody has different goals;
Dave suggests saving 15% of your income, and putting it in a mutual fund to acquire compound interest. This step is extremely important, if we don’t invest in our future; we wont have anything at all when we need it the most. In One For the Money step 11 discusses the importance of saving for retirement, and of utilizing a wise investment program. Self-reliance is heavily emphasized in our church, it is so important to be able to stand on our own two feet. Saving for retirement isn’t something that I have put much thought in. I’ve had the attitude that I am still young and have plenty of time to take of that later; reading this book has really helped to change my mindset about money, and investing for my
Ben Stein's letter, "Birds and Bees? No, Let's Talk about Dollars about Dollars and Cents", discusses the importance of developing capital early in life. Through his use of personal anecdotes, didactic, and repetition, Ben Stein effectively informs his son, Tommy, that he must start building financial capital at a young age to ensure a successful and stable life later on.
The Millionaire Next Door written by William Danko and Thomas J. Stanley illustrates the misconception of high luxury spenders in wealthy neighborhoods are considered wealthy. This clarifies that American’s who drive expensive cars, and live in lavish homes are not millionaires and financially independent. The authors show the typical millionaire are one that is frugal, and disciplined. Their cars are used, and their suits were purchased at a discount. As we read the book from cover to cover are misconceptions start to fade. The typical millionaire is very frugal in all endeavors and finds the best discounts possible. A budget is implemented daily, monthly, and annually for a typical millionaire. They live by the budget and are goal oriented. Living well below their means is crucial for a millionaire, and discovering ways to allocate time and money more efficiently. The typical millionaire next door is different than the majority of America presumes. Let’s first off mention what it is not. The typical millionaire is surprisingly not the individual with the lavish house worth a million dollars, owning multiple expensive cars, a boat, expensive clothes, and ultimately living lavishly. The individual is frugal and often looks for discounts for consumable goods. The book illustrates the typical millionaire in one simple word: frugal. It is shocking to believe that this is true, but it does make sense. To achieve financial independence is inherently more satisfying and important than accumulating wealth. According to the book the majority of these millionaires portray characteristics of being sacrificial, disciplined, persistent and frugal. In the book it states, “Being frugal is the cornerstone of wealth-building. Yet far too often th...
...oice that it is more advantageous to their financial well being to accumulate wealth instead of material belongings. Frugality, planning, living below your means and a smart investment strategy are paramount to accumulating wealth
The book I chose to review for this course is titled, “The Millionaire Next Door”, by Thomas J. Stanley, Ph.D., and William D. Danko, Ph.D. After learning that it was published in 1996, prior to the widespread availability of the internet, and subsequent ebusiness boom, I was slightly sceptical that the information held within might not be relevant for someone like myself trying to thrive in today’s chaotic economy. Fortunately, I was wrong. The Millionaire Next Door is full of concepts and principles that put into perspective how we view money and status in our society, and also debunks the myth that America’s wealthy are the ones doing most of the spending while living elaborate and carefree lives. There are several ‘takeaway’ principles that are presented to the reader. I will be focusing on the five concepts and ideas that impacted me the most.
While traditional wealth management firms have their experts invest their client's capital, The Midas Legacy gives members a financial education, encouragement and lessons from successful traders and investors so that their members can make their own decisions. People who want their own business, those who want to buy and sell stocks and potential real estate moguls can choose their own path to wealth, with research services from The Midas Legacy helping them make wise choices. The Midas Legacy believes that anyone can learn the secrets of building wealth and then take charge of their financial
“Welfare.” Everyday Finance: Economics, Personal money management, and Entrepreneurship. Vol. 1 Detroit; Gale, 2008. 263-265, Gale Virtual Reference Library. Web. 24 Sept. 2015
In Finance is Personal, Kim Stephenson and Ann B. Hutchins, explain concepts that support decision making around money. The authors base their concepts on personal values, attitudes, beliefs, and goals. Stephenson and Hutchins also teach the reader how to cope with thinking, feelings, and behaviors. In doing this, the author`s help the reader learn how they can handle their money to get what they want—not what someone else thinks they must have to be happy.
Parents may not feel comfortable enough with their own financial situation to discuss personal finance with their children (Williams, 2009). Additionally, the parents, or other influencers, may not have a full grasp of certain concepts of financial literacy. In an article by Carlin and Robinson (2010) it was noted that “many retirement-age adults lack the financial literacy to understand the basic features of their retirement plans.” Financial literacy through socialization and practice may not be enough for students; whether it be “disadvantaged” youths who often lack a high quality of life at home, or youths whose parents have stable jobs with retirement
“Horace Mann firmly believed in the utility of education to improve society and humanity” (Groen, 2008). Horace Mann said "Education prevents being poor”. As true as this quote may be, there is also a strong relationship between our debt to income ratio from the amount of loans we accrue while educating ourselves and the income we earn to repay the debt. Taking steps to educate before the problem gets worse is very important. Financial Management programs should be just as important as the other curriculums that are a required for graduation. Every high school students should be taught financial education regardless of sex, gender, color or race. One of the greatest barriers to financial literacy is overcoming student’s fear of borrowing. They should be taught how to make responsible choices financially. Some students are afraid to get into too much debt; therefore they prefer not to pursue higher education. Others worry about credit cards without the proper knowledge on how it works. This program will help relieve those fears and teach the proper ways to utilize money respon...
High school seniors takes deep breaths and parade onto the stage. The beginning of a new chapter awaits as they make the journey from one point of the stage to the end. They reflect on what they have been taught in those many years of high school. The most terrifying fact while graduating high school is the next step: making it on their own. Because they have taken part in the appropriate classes, the students are certain that they have gained the correct knowledge to begin making their mark on the world. In high school, it is crucial to achieve the appropriate classes in order to feel ready to take on the world ahead as an adult. However, many students lack proper education. One key example is financial literacy. Financial literacy is the
According to Investopedia (Asset Allocation Definition, 2013), asset allocation is an investment strategy that aims to balance risk and reward by distributing a portfolio’s assets according to an individual’s goals, risk tolerance and investment horizon. There are three main asset classes: equities, fixed-income, cash and cash equivalents; but they all have different levels of risk and return. A prudent investor should be careful in allocating each asset class to his portfolio. Proper asset allocation is a highly debatable subject and is not designed equally for everybody, but is rather based on the desires and needs of the individual investor. This paper discusses the importance of asset allocation, the differences and the proper diversification within the portfolio.
Personal financial planning is important because it helps you prepare financially for the future. My first short-term financial goal is to have an 8-month emergency savings account. This class helped me understand the important steps needed to achieve my financial goals. “Successful financial planning requires specific goals combined with spending, saving, investing, and borrowing strategies based on your personal situation and various social and economic factors, especially inflation and interest rates” (Kapoor, Dlabay & Hughes, 2012). First I evaluated my spending habits. This allowed me to see where I was
They observed that millennials have less trust in banks and financial institutions because of the Great Recession. Millennials are more educated when it comes to financing big purchases compared to previous generations. The research also shows that 80% of millennials believe they should start saving for retirement as soon as possible. Most millennials were making their break in the “real world” when the Great Recession broke out, not only did this affect their trust in financial institutions, but it also made them take financial matters into their own hands. Millennials financial stability is on the rise and growing at a much faster rate than their counter generations. Millennials are becoming more diverse with their investment options and especially taking into consideration the need to save for their future. This article exemplifies this case for millennials and their
Rich Dad, Poor Dad is a book that educates readers about financial literacy. Robert Kiyosaki, the author, has two dads – one rich and one poor, although the rich dad is not his, but his friend’s dad. Both dads have different views about earning money, and Robert had the choice of contrasting both views while growing up. His rich dad’s views were more powerful and useful to Robert. The author guides the reader through six main lessons his rich dad taught him on how to let money work for you, instead of working for money.