Whether we like it or not acquiring money is the backbone of our very existence. It has to be, because whether you have a lot of it or very little of it, from cradle to grave, money is going to be an important aspect of your life. In fact, even after death there are money matters to be considered.
So given the fact that money is central to just about everything that we do in life how is it that very few people have more than a superficial understanding about money, wealth and finance? The answer is because they’ve never had a personal finance education. Concepts like investing money, credit-card debt, wealth management and taxes are either ignored or glossed over at school while topics such as essay writing, algebra and sports are given prominence. This is especially tragic given the fact that most young adults will find themselves with a significant amount of debt (education, car, house etc.) against their name in just the first 10-15 years of their adult life - debt that they’ll probably spend a large portion of their lives paying back and debt that will have a significant impact on their ability to accumulate any real wealth in the future. School isn’t designed to help you create wealth, it’s designed to create workers who will go on to pay taxes – and the tax system is designed to take first and ask questions later. Most people are hobbled before they even have a chance to get started.
The sad reality is that when it comes to personal finance most young adults are cast into the wilderness and left to fend for themselves with very little practical knowledge on how to manage money, save money or invest money - and without having any meaningful financial management or tax strategies in place.
But the good news is that even if you didn’t learn wealth management at school it’s never too late to start your financial education. In fact, no matter what stage you’re at in your life it’s never too late to begin to learn about money - how money works, how to use money, how to make money work for you. No matter what your job, no matter what your financial situation is at the moment, it’s well worth your time and effort to start learning about money, wealth and taxes.
Unless it’s part of your job, the key is not to think about it as an ‘education’ but rather think of it as a ‘hobby’. Get interested in money and get interested in wealth, because learning about money is a life-long process no matter what your current age - and there is no finish line. The more you learn about money and wealth, the more there is to know and consider.
While that might sound daunting, the good news is that getting started is easy. You can start with simply learning how to manage your money more effectively, budgeting and paying off debt and, if it’s not already part of your daily diet, start to read the personal finance section of major newspapers (sacrifice a little sports reading for a little finance reading perhaps). There you’ll find lots of great information for the individual like money advice, budgeting tips, money management tips, saving money, investment news, taxes, retirement etc. and it’s a great way to learn all the financial terms and jargon and to get an insight into topics and ideas that were previously unknown to you. The more you read, the more you’ll learn. Here are some popular newspaper personal finance sections to get you started, but these are just the tip of the iceberg:
- New York Times ‘Your Money’
- The Telegraph Personal Finance
- Yahoo Personal Finance
- Wall Street Journal
- Fox Business
- The Star
- The Globe and Mail
- The Guardian
- ‘Rich Dad Poor Dad’ – Robert Kiyosaki
- ‘Think and Grow Rich’ – Napoleon Hill
- The Total Money MakeOver – Dave Ramsey
- The Millionaire FastLance – MJ DeMarco
- The Richest Man in Babylon – George S. Clason
Remember, no matter what your financial status or your age it’s never too late to start your financial education (or ‘hobby’). You’ll most certainly benefit from it. If money management and taxes were subjects at school they would be courses that you’d never graduate from. Getting the most from your money is a life-long process and even gurus like Warren Buffet spend a great deal of time thinking about ways to maximize their profits. As Warren himself stated on a 60 Minutes interview ‘I’ve spent my whole life learning how to pay as little tax as possible [paraphrased]’. He’s probably still learning. So should you.