Buying
Financial literacy is the language of money and the measure by which we can assess our understanding of finance. We all have the potential to be more successful with our finances and grow our wealth beyond what we see today, but what determines these results is our understanding of how money works.
Knowledge is one of the key players that determine what we see in our own lives. We all understand the simple concept that if we want to see better results in an area of our life, we must first understand the issue at play.
Take an example of something I experienced over the holidays; TrilliumWest hosted some amazing online events for everyone at the brokerage and they were so much fun! One of the events was online poker with play money. I wanted to become a better poker player before the night of the event so that I could stay afloat with some of the more skilled players. So, I started reading up on poker tactics and strategies more advanced than the simple ones I already knew. By the end of the week, I was seeing a significant improvement in my practice results than before. By the same token, you may want to improve your personal finance for any number of reasons--better budgeting, saving for a vacation, cutting expenses, saving up for a big investment like a home gym, or the main focus of this series, purchasing yourself a home! If this is the case, you want to improve your understanding of money.
In this article I’m going to go over how to improve your financial literacy so you can achieve the financial goals in your life, regardless of their size!
These are one of the best ways to absorb information while you're doing mundane activities like driving, walking, or cleaning the house. Not only that, but podcasts offer a key feature that most other sources of knowledge don’t--conversations. Some episodes out there are just multiple financial experts conversing with each other which is a great way to learn what they know and how they think.
Great Financial Podcasts:
There are a plethora of finance courses online at your fingertips. These are great for a more interactive learning experience with visuals and videos.
Credible Finance Courses:
The jargon thrown around the topic of finance can be daunting at first, but it can be surprisingly easy to read up on the basic terms in finance and pick up the lingo.
You’re naturally going to pick up on most terms from various books, podcasts, and courses, but the easiest way to hit the ground running is to buy a financial dictionary. It’s self-explanatory, simple, and effective!
Learning about the difference that separates investing from all other financial strategies is essential to understanding the single most important part of growing wealth. Everything from exponential growth and leveraging money to investment deals and equity partners.
Passive income is also a key part of investing; it’s the backbone of financial freedom because it means you’re “making money while you sleep” as most people put it. Essentially, passive income is money you make from investments that do not require any active work or attention from you in the moment. A great example of this is rent from a rental property you own.
You also want to learn the basics of all the different investment vehicles. Real estate, stocks, bonds, index funds, mutual funds, ETF’s, etc. Being aware of the different investment methods will give you more insight into personal finance and wealth management.
If you want to purchase your first home, educating yourself about finances is essential to the process. Learning about money from people who have successfully built and maintained their wealth is a great way to save money and grow your own wealth.
When I first sought out knowledge about money I looked at the most successful people in finance and business. Most of this knowledge was obtained from books written by these individuals. I am a huge advocate of reading and a major bookworm for this reason. Books allow you to handpick your own mentors from any location, any industry, and any time period in history. All their thoughts and knowledge are right in your hands!
If you could spend an hour with Elon Musk, sit down with Bill Gates, spend the day with Martin Luther King Jr., plant a garden with Nelson Mandela, go for a walk with Mahatma Gandhi, listen to Mother Teresa speak, or sit in the audience of one of Abraham Lincoln’s speeches, wouldn’t you jump at the chance without hesitation? Books allow you to dive into the minds of these historic people and learn what they learned, see what they saw, and think in ways you never knew were possible.
There aren’t any secrets or shortcuts when it comes to building wealth. People who build their wealth just have a different outlook on finances and possess knowledge that gives them an advantage - and it may be less complicated than you think. Financial literacy presents opportunities for you to budget your money effectively, build your wealth over time, and bring you much closer to purchasing your first home!
Here are my 3 top book recommendations for learning financial literacy:
- Think and Grow Rich
- The Millionaire Next Door
- Secrets of The Millionaire Mind
Side Note: Some of these books may contain some content specific to the American financial system. This doesn’t mean the knowledge isn’t valuable if you live in Canada, it just means you have to take that into consideration when reading the examples and understand the laws within your own country and province.
Financial literacy is indisputably the most critical aspect of wealth accumulation. Knowledge in any field is what determines one’s ability to thrive within it.By reading about financial literacy, understanding why it is so important, and diving into that source of knowledge, you’ll find yourself well on your way to financial growth.
The list of books I’ve provided will give you more than enough tools to get you started, from there you can expand your wealth to your heart’s content! The solution to any problem stems from how deeply rooted your knowledge is, so if you want to grow your wealth, you need to grow your knowledge of wealth. Most people get caught up in this ideology that your income determines your wealth. But just like you saw in my budgeting article, two people with the same income but different budgeting methods will end up with vastly different savings. Similarly, two people with the same income but completely different levels of financial literacy can have net worths that are kilometers apart! (Hey, we’re Canadian eh?)
Peter Drucker put it best, “today knowledge has power. It controls access to opportunity and advancement.”
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