How much do you really know about money? For many people, the answer to that question is not all that much. The dangerous thing about this is that they think they know a lot, but really know very little. The problem is in how we tend to learn about money. Unless you are specifically trained in matters financial-by virtue of your education or your job-you probably haven't had much formal training in how to manage your money. In the best of times, this is a problem. During turbulent economic times such as we're facing right now, knowing how to manage money could literally mean the difference between surviving-and not surviving.
The problems start with our schools and colleges. Academic curricula tend to be notoriously deficient when it comes to financial education topics dealing with managing money. We wind up learning about money from anyone who is willing to offer up advice-which is pretty much everyone. Of course when you evaluate how successful these folks are with their own finances, you might well realize that they may not be the best teachers. Just as learning how to fly a plane from someone who isn't a pilot doesn't make any sense, learning about money from someone who isn't wealthy is just as futile.
With this in mind, the first step in dealing with the recession-or in preparing for the future regardless of present economic considerations-is in understanding your money. Too many people think that understanding their money means being able to balance their checkbooks. Despite the fact that far too many people have absolutely no idea how to do that, the ability to balance a checkbook does not represent a sound financial education.
It's interesting to note that during a recession, the wealthy continue to grow their wealth. Even in the worst of times, the rich get richer-and yes, the poor get poorer. And despite what you might be thinking in light of some recent reports about the crooks on Wall Street, most wealthy people do this completely legitimately. These people have a complete set of strategies already in place to not only preserve their accumulated wealth, but to grow it daily.
The danger of not understanding your money becomes immediately apparent when you read about wealthy entertainers or sports figures who manage to blow millions upon millions of dollars and wind up broke, simply because they didn't understand how to manage and invest it. Regardless of your net worth, don't fall into this trap. Make it a point to know as much about money and investing as you can. Take steps, sooner rather than later, to obtain a complete and thorough financial education.
The problems start with our schools and colleges. Academic curricula tend to be notoriously deficient when it comes to financial education topics dealing with managing money. We wind up learning about money from anyone who is willing to offer up advice-which is pretty much everyone. Of course when you evaluate how successful these folks are with their own finances, you might well realize that they may not be the best teachers. Just as learning how to fly a plane from someone who isn't a pilot doesn't make any sense, learning about money from someone who isn't wealthy is just as futile.
With this in mind, the first step in dealing with the recession-or in preparing for the future regardless of present economic considerations-is in understanding your money. Too many people think that understanding their money means being able to balance their checkbooks. Despite the fact that far too many people have absolutely no idea how to do that, the ability to balance a checkbook does not represent a sound financial education.
It's interesting to note that during a recession, the wealthy continue to grow their wealth. Even in the worst of times, the rich get richer-and yes, the poor get poorer. And despite what you might be thinking in light of some recent reports about the crooks on Wall Street, most wealthy people do this completely legitimately. These people have a complete set of strategies already in place to not only preserve their accumulated wealth, but to grow it daily.
The danger of not understanding your money becomes immediately apparent when you read about wealthy entertainers or sports figures who manage to blow millions upon millions of dollars and wind up broke, simply because they didn't understand how to manage and invest it. Regardless of your net worth, don't fall into this trap. Make it a point to know as much about money and investing as you can. Take steps, sooner rather than later, to obtain a complete and thorough financial education.
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