What Does School Not Teach Us About Money? ( REAL MONEY WISDOM)


What Does School Not Teach Us About Money? ( REAL MONEY WISDOM)

Rich dad, poor dad has taught me much more than my school.

We never really teach about money in school, despite the fact that we teach math and arithmetic. When we do not learn how to save money effectively or how to invest money and money management strategies in general.


So I started reading a lot about the subject. But, there are some things I learned and so we will talk about the basics of finance and money in a book I read “Rich Dad Poor Dad” by author and economics teacher Robert Kiyosaki.

Explains some concepts that if applied correctly can change your life.

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1. Invest inactive assets and avoid liabilities.


Most people realize that an asset is better than a liability. However, few can apply these concepts correctly in simple terms.

Assets (ASSET):

Anything that brings money to your account

Generally, that gets more value or you develop over time


Anything that takes money out of your pocket

Generally that it loses its value or continues to take money out of your pocket over time

The difference between the two is cash flow. So, you have an asset, which brings money to your account, in terms of money it becomes an income.

And on the other hand, you have a liability that takes money from your account and in terms of cash flow translates as an expense , because the money leaves.

Let’s go to some examples:

We assume that you have € 50,000 in your bank account and you want to buy a new car, this model costs € 20,000. Is this an asset or a passive investment?

The first thing is that it will take money out of your pocket or account. When you buy the car it will take € 20,000 from your pocket to the pocket of the intermediary or the store or the person from whom you buy it.

So it’s an expense and you can probably categorize it as a liability. From the moment you buy the car come other expenses related to the car, as you will have to systematically pay for petrol, you will have to pay for taxes and insurance. These expenses are repeated periodically and are paid out of your own pocket. So this is a passive asset, which does not bring money to your account.

Now let’s take an example that is more controversial and a little more interesting, which is a house. Many people will say that a home is always an asset, but this is not necessarily true.

Suppose you buy a house to live in and the house costs € 150,000. In case you have € 50,000 available in your account, you will need to take a loan of approximately € 100,000. Now you have to pay every month the costs of the loan which may be 450–600 € from your pocket.

Half a minute, you will tell me that you are paying for the house because it will gradually become yours, it will be in your possession. But,

You are going to pay back more to the bank than you actually borrowed. So if you borrowed € 100,000 you will have to pay back € 130–150,000 to the bank at the interest rate. This is money that you did not borrow and it is definitely an expense.

The other issue is that owning a home comes with other expenses, such as utilities, repairs, and housing taxes.

In this case the house functions as a passive investment element.

Read also: 9 personal finance rules school doesn’t teach us

One of the cases where a home really works as an asset is if you buy it as an investment with the goal of renting it.

Again the same example, you buy a house with € 150,000 of which 100,000 come with a loan from the bank. You have to return € 450 every month to the bank. Let’s put € 100 for taxes and repair costs. In this case, your expenses amount to 550 € in total.

If you rent the house for 600 € per month then this means that you will have a 50 € profit, which brings money to your account. So it is an active investment asset and the cash flow offers you income.

As Robert Kiyosaki points out, avoid passive assets as much as possible and invest in income assets from an early age.

Obviously buying a car or a house is not a bad thing. But understand the difference between passive and active assets.

One thing that most of us are familiar with, especially when we are not from well-to-do families, is spending constantly about what we earn each month. And every time we make more money, we spend more.

This is something that happens all the time if you suddenly find yourself with enough money to spend. Then you want to spend on all those things you could not get when you were younger, for example.

One of the strategies to reduce your expenses as much as possible is to live lower than your intentions. To make it clear I will give you an example.

Suppose you work in a supermarket and make € 700 a month and manage to live on that money while working in this job. But then you upgrade to finding a job from which you get 1000 € per month.

Now what most people do is spend all that money on amenities they did not have before. This is not entirely logical as long as you manage to live decently with 700 € and really what you should do is get this difference in money to save and invest in active sources of income.

That is, instead of spending that money on things you do not really need. Of course, there is nothing wrong with buying things, as long as you have the financial means.

A simple rule to follow when buying products or items is: if you do not have 10x how much for the item you want to buy then do not take it.

So if I buy an iPhone for 700 € then I should have about 7000 € in my account. Except when you make a profit from it, that is, it is used as an asset. However, in reality, they are few.

Photo by Marten Bjork on Unsplash

2. Learn not to work for money.

This may sound absurd. But for some strange reason when we go to school the only way we are taught to make money is to exchange a unit of time for a unit of money.

For example, we exchange 1 hour of our time for 5 € or we exchange 10 hours for 200 €, etc. It does not matter how much we get from the moment that every hour we spend we exchange it with a certain number of money.

The main reason you advertise so much is that it has a fairly low risk. As well, if you spend a certain amount of time on this thing you will get a certain amount of income back.

However, like everything, there are other options and alternatives out there if one wants to see what is around. Like working non-profit for a period of time to enjoy an exponentially growing reward.

For example, you may decide to start a clothing brand and work on that brand for two or three years without making a profit from it. But what you are likely to find is that in the next 5–10 years, you will be spending the same amount of time as the first day you started your business, but this time you will be making € 10,000 a month.

Do you see what is happening here? On the first day, you put a certain amount of time, which is at 8 hours a day and you get nothing. Five years later you work at the exact same time but this time you make € 10,000 a month.

Notice here the exponential growth of your growth. You still put in the same amount of time, but your income increases. Obviously, the risk here is that you can put a lot of workload for quite some time without getting paid. But this is a risk that people who embark on this journey are willing to take for something exponential.

The beauty and wisdom in this area that you really apply delayed gratification or that you receive a late reward for a previous job.

Read also: If you have fears around making money: you need to read this

3. You look at your work.

Many people think that their profession is their job. So when they go to work they think about their work. But in reality, your profession is not your job.

So if all you do is go to your profession and not look at your work, then you will end up looking at other people’s work and increasing other people’s wealth.

And what is your job?

Your job is to do what you do outside of your profession, that is, to use the money you get as a reward for your profession. The money you get must be put into “slavery”.

And how do you make money work for you?

It is to invest them inactive sources of income, as we said above. Some way to invest in assets is to put money into your business, which you can grow.

Also, your income can be increased by putting money in shares, bonds, or funds, in properties, in the business market, or in the creation of your own business, etc.

This is how you look at your work and not the work of others.


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