Why to gain financial literacy?

As we’ve seen in last article is-finance-only-for-professional, that how finance is relatable to all of us, let’s now see the role that financial literacy can play in understanding and enables the money-making process easy.

Financial Literacy enables an individual to escape the rat race of the jobs and can take the control of their life and money. And not learning and implementing the same ensures that you remain loyal to your matrix of rat race. Financial literacy covers the many concepts such as time value of money, investing, returns on investments, compound interest and many others. Among all these concept the most vital is to understand the compounding.

“Compounding interest is the eighth wonder of the world, he who understands it earns it, he who doesn’t pays it”

– (Albert Einstein)

Similarly, financial literate person would eventually break the chains and would be leading his life with the grace and discipline, while thriving his investments. Rest of the society keep themselves busy in paying the EMIs for their dream house, dream car and in worst case, dream life partner!

Escaping the matrix won’t be that easy! Many ups and downs are bound to come but the journey of achieving the financial freedom is worth of those downfalls. But the thing is how would an individual would break the chain and join the club of winner.

Ideal way for an employee to be achieve financial freedom is to milk their income. The point here is they just need to change their lifestyle and perception first of all. In general people, earn salary, spent it on their needs and wants and if anything is leftover, it would go for savings! That’s the trap again! Change the mindset. Earn the salary, invest at least 25 % of your salary, now spend the remaining amount for your daily needs.

 The Rich invest their money and spend what is left; the poor spend their money and invest what is left

-(Jim Rohn)

To conclude, the above image would easily make all understand how to manage the finance to build your wealth eventually.

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