¿What we know about financial education?

Financial education is a topic that surprises me the most when I mention it in a conversation, most people make a face of not knowing what I'm talking about, others have a fairly basic notion. For my part, I have dedicated some of my reading time to learning about it. Even so, I feel that I do not master the subject and that what I possess are mere phrases of the proverb to motivate someone to invest.

The jargon used in the financial books is complicated and in my opinion, even some authors do it on purpose to scare away the neophytes. But as is well known, "ignorance is a choice, in the information age". You search the internet and find the financial enthusiasts wanting to advise you and give you the plan to make your first million. Other more orthodox people use the usual financial jargon that only leaves you with a headache.

But why is it important that we learn about financial education? First, because very few of us touched the subject, some of us do not even know what it is, and we assume that it is something only bankers use. And those who have a little knowledge about this, you see them doing business, fulfilling goals, finishing projects. Second, the society in which we live demands it, if we want to be competitive in terms of fulfilling goals and projects. Third, it should be included in the basic subjects of tuition such as science, mathematics or Spanish, it is a basic need. This is why it is so important that we all learn financial education.

Financial education is the ability to understand how money works in the world: how you get it, manage it, invest it. More specifically, financial education refers to the set of skills and knowledge that allow an individual to make informed decisions about all of their financial resources. Isn't strange to anyone the desire to earn extra income to make the trip that you want to do since you were a teenager, to make those modifications to your home, a new car would great; How about that leather jacket you saw that goes out of your budget. We live constantly in that anxiety of sacrificing something to obtain something, no matter the socioeconomic stratum that we are. Currently, in countries such as Australia, Canada, Japan, the United States and the United Kingdom, increasing interest in personal finance has become one of the main objectives of state programs. And what about us?

Well, let's start with the basics, produce the money. While it is true most of us are salaried, we have a biweekly income, less discounts. This gives us a limited capital. But lately you see many people undertaking online business, home shops, etc. Looking for that extra income that provides us with some financial freedom we want. And although some have done well to others, not so much. And hence the first point; knowledge. The more you have, the more opportunities and tools you have to offer to the market. How we get the knowledge ... I think it's too much to say it. READING!

Finding a market niche in which there is still no competition, is very difficult. You must be a very creative person to find this goose that lays the golden eggs, an untapped sector of the market. Also counting on the fact that you are not the only one you are looking for. Long ago I read a book by Al Ries and Jack Trout called Marketing Warfare, it mentioned something about "The principles of the Guerrilla" described it as "finding a segment of the market small enough to defend" and then understood this; I do not necessarily have to compete with the big players in the market in my field. I can attack a segment forgotten by my competitors, this segment that they do not satisfy, we start small, and we grow. It is something more realistic and possible, strategy used by Microsoft and Apple in the 80s against the dominant computer sector at that time, IBM. They attacked the sector forgotten by IBM, rather than forgotten, ignored. The common user, the student, the housewife. Today we see that they were successful in their strategy. And this to quote an example.

Once we start producing extra money, comes the part where almost everyone drowns; manage it. And here we start the cycle again ... Knowledge. As we acquired it, it is too much to say it. In this part of our growth we can resort to classics such as Rich Dad, Poor Dad by Robert Kiyosaki, it is a classic that many Neo financial advisers think should be part of compulsory reading in schools. While others are stoning him for selling false hope, read it and draw your own conclusions. Secrets of a Millionaire Mind by T. Harv Eker, This book analyzes in parallel the story of two people, one who fails and another who succeeds, while irrefutably exposes the fact that what differentiates one from another are their habits. In this book we will find very concrete steps to change those habits and thoughts that stop our financial goals. And although these books do not have "the recipe to be a millionaire" only give you some lights. Since here is the core of the issue of financial education. Manage your resources, is something that very few we know how to do. Generally when producing extra profits the first thing we do is run to settle debts. What ultimately leaves us in the same and becomes a vicious circle to produce what we already owe. The main idea of ​​financial education is to understand how money works. Understanding something allows us to control it.

How many times have you looked back, remembering some bonus, compensation or reward with which you wished you had done more but you didn't realize when it disappeared. That's because of a lack of financial education. Knowing how to manage and then invest your money is as essential as knowing how to read. It's about making the most of the resources you have to produce more and reinvest, until you reach the point of increasing your income, keeping the cash flow constant. Let's keep acquiring knowledge, Benjamin Graham's Intelligent Investor, This book is already a legend within the world of investment, especially by its author, Graham was professor of great eminences of investment as Warren Buffett, Walter Schloss and Irving Khan. Although this book is not purely Financial Education, it is mandatory for anyone who at some point in life needs or wants to invest.

We continue on our path of financial illumination, and I say we continue because I continued in my search for financial utopia. But I think I already have some basic principles clear. First, gain knowledge to be competitive. Second, really learn how money works to control it. Third, invest instead of spending. These three steps comprise basic principles of financial education.

This was just a little bite of the vast world of financial education, I will continue my research, reading, applying and learning. I hope to find you on that path of knowledge.

"It's not how much money you make, it's how much money you keep, how hard it works for you and how many generations you have."