Getting "smarter" about money is a proven road to riches
I am not referring specifically to college education either. I am referring to "getting to know money".
You see, most wealthy people (people with a high net worth) seem to know money pretty well. They know where and how to save it. They certainly know how to make more of it. Perhaps most importantly, they know how to invest it. There are very few millionaires who do not have an excellent education on "how money works" as a medium of exchange.
There are some popular exceptions to this rule such as professional athletes, divorcees, trust-fund babies, and celebrities. Consider how many stories of celebrities and athletes going bankrupt or having significant amounts of debt that we are aware of. It seems that the only difference between those who have received a windfall due to celebrity status or otherwise, and those who remain millionaires for decades, is the level of education they have about their money.
Most of the wealthy got their status because of their desire to study riches. Take some of the wealthiest investors in America as an example:
What all these men have in common is they have dedicated their lives to learning about money!
Buffet is said to read some 500 pages of financial statements per day. This is taking learning about money to a new extreme. Any coincidence that his passion and desire for learning about money and value has led him to be one of the richest men in America? I think not.
Icahn is a ruthless investor and seeks undervalued assets to turn a profit. He has developed an incredible ability to remain patient and concentrate his bets and investments in definitive assets. He has consistently beaten the returns on Buffet by nearly 10% over the last 30 years. How could he possibly have developed these skills? He learned about money and value investing by educating himself on how to read and interpret financial statements.
For Dalio, it has long been said that he had an innate ability to find a way to learn from anyone who had something to teach. He is reported to have even listed to his barber or somebody that he caddied for to pick up valuable long-term investing tips. This should all come as no surprise that he made his money by learning about money.
These are some extreme examples of how learning about money typically leads to generation of assets and accumulation of net worth. However, it can be true for all of us as well.
How can "everyday folks" become wealthy?
Same answer as before: improving your education and understanding of money.
For example, try to predict whether learning about any of the following would increase or decrease your net worth"
My guess would be that your net worth would increase if you learned any, or all, of the above! What do you think?
Where You Can Start Learning About Money
Picking one of the items listed above and searching the library or the internet for reputable sources would be a great place to start. Your goal should be to learn slowly and consistently over time. This information and knowledge will not be an overnight success, but I think you will be surprised at how quickly you see measurable differences when you start teaching yourself about money management.
I have a resource page on this site that lists my favorite and most highly recommended books that I have read which have made profound improvements on my understanding of money management and contributed to substantial improvements in my net worth.
Over time, you will develop the skills necessary to be a dependable money manager which is the most reliable method to increasing your wealth.
Please comment below which area of money you plan to learn about first.
I started this blog because friends and family often asked me similar questions regarding personal finance. I was surprised just how much people were interested in improving their financial situation, yet had no idea where to start. It made perfect sense to start a blog and share all the information that I have learned along the way with others. You will find many resources and links referred throughout the blog. I have found all of this information useful and continue to grow my knowledge and understanding in the personal finance space. Admittedly, even I struggled heavily in the beginning with understanding how to improve my financial situation. The power of reading and note taking got me where I am today and will continue to provide a return on investment for years to come. I look forward to sharing with you along the way.