Robert Kiyosaki is known best for his books on financial literacy which help people to understand how money really works. So many are not taught how to earn, use & spend money, as a result it uses them. In his flagship book Rich Dad, Poor Dad Kiyosaki shares an experience of when he was young. He and a friend asked the grownups for some money. When told to go make some, they did! Robert’s dad found him later on in the driveway with Plaster of Paris scattered about and the boys smoldering tin from used toothpaste tubes doing just what they were told to do, make money.

While this is a humorous scenario it is meant to illustrate perhaps two things. That we often times go about making money in similarly ridiculous ways, but conversely, that there is a need for out of the box thinking when it comes to making money.

In schools today most children grow up learning how to work for others, how to be employed and how to do it well. Doing what they are told and conforming are common themes that stem from most educational processes today. These things are often learned at the expense of financial literacy.

Whether you learn how to build your own business or how to work for someone has done this, financial literacy is essential. It is critical for example to let sink in just how interest works. It can either work for you or against you and not fully comprehending the outcome of interest is often the difference between those who accrue it and those who charge it. It is not something to be trifled with and can be deceptive to those who know not its workings.

Another principle of financial literacy that is missed out in schools, either by skimming over it so briefly or by complete avoidance, is the role and importance of having a savings account. I was given a little bank when I was a child, there were three slots; One for spending, one for saving and another for charity. I was taught that it was my prerogative where to put my money, but to help me decide there were percentages on the outside of the bank. Savings usually includes ten percent or more. This is what many in the world of financial education call “paying yourself first.” The idea is that you typically spend all of that which you have to spend, so by taking out ten percent once any income comes in, you will typically not live any less off than you did before and you will be prepared for future purchases or emergencies.

So, how do I build my financial literacy you ask? Well, the answer is quite simple, though it does take some work. Start reading. In addition to reading you are going to want at least a bit of structured instruction. This can be achieved by taking some online finance courses. They are a quick and easy way to build your financial literacy while at the same time maintaining your current job (assuming that you don’t work as a sleep deprivation patient).

However, whatever you do, do something! Your future happiness just may be based on it. While money is not the source of happiness, an understanding and wise use of it typically is essential to it.

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