Personal Finance

People are financial uneducated.  This is one of the greatest tragedies of the last 50 years or so.  The fact that people understand so little about money has led to a nation of debt and corruption.  Few have the knowledge to understand what is going on meaning that the "powers that be" are free to operate as they see fit.

Broke Nation

I will focus my thoughts on the United States but the same rules apply to most Western countries. The United States is broke.  I am not just referring to the Federal Government and the insane debt it accumulated.  Instead, I am talking about the average person on the street.  This person has no net worth whatsoever.  Due to factors which were present the past few decades, this person accumulated a negative asset base.  What that means is they owe more than they have. 

There is a difference between rich people and everyone else.  The rich discuss net worth.  Lists of the richest people in the world are determined using this criteria as the basis.  Contrast this with the average person who, if money is discussed, mention income.  To this individual, how much you make is critical; to the wealthy, how much you have.  This is a big difference.

Since the housing collapse in 5 years ago, the average American has zero.  Actually, because of debt, they have less than zero.  They live in houses that are worth 30%-40% of what they are indebted for.  At the same time, these people are most likely carrying a credit card balance somewhere in the neighborhood of $10,000.  Couple this with the fact that most people have some type of car payment and you see that debt is the common ailment.

I once read a study that really spelled out the situation.  The surveyor asked people if they were able to put their hands on $2,000 within the next 30 days.  I forget exactly what the percentage was but it is unbelievably low.  That is insane.  How can one not be able to put his or her hands on $2,000 in a month?  The reason is because most of America is broke.


There is a national epidemic which is occurring that outside the health field.  That disease is killing people across the country.  It is called consumerism.  This single idea is what is obligating people to a life of financial slavery.

Madison Avenue runs our lives.  People are told exactly what to do.  Our perception of success is defined based upon what car we drive, clothes we wear, and perfume we scent ourselves with.  Anything less than that and one does not have the right to feel successful.  This message is delivered to us over time to the point where it is driven home.  "Keeping up with the Jones" is a national pastime.  People feel entitled to the "finest things in life" regardless of current income status.  Again, the non-weathly concentrate on income as the basis for everything including whether something is affordable.

Another factor that enters into this is the idea of easy financing.  Today, to be part of the consumerism extravaganza, one does not even need to be able to pay for the stuff.  Easy credit is here to help.  One only needs to sign his or her name and take the item home.  Almost every industry offers credit in some form.  And, of course, if it does not, the credit card companies are happy to step in.  Trillions of dollars worth of stuff has been sold in this manner, much of it ill advised.

Personal Finance is the Cure

The cure for this plague is the educating of the masses in the area of personal finance.  Our educational system is so archaic that it teaches children nothing about the subject of money.  This is one area where the school system has left it to the parents and they failed miserably.  Naturally, if we look at the habits of the parents, we realize they are financially uneducated also.  It is no wonder this problem is multiplying.

People need to learn that it is time to take responsibility for their actions.  Educating oneself about the basics in finance is crucial.  However, it is not enough to learn about checks, credit cards, and the stock market.  It is equally as vital that everyone understand why they do certain things.  People shop for a variety of reasons; often to try and make up for something lacking within themselves.  This is a problem that goes deeper than ill-advised spending.  At the same time, people often make financial decisions without giving any thought as to what they are doing.  This creates another situations where the subconscious becomes programmed to spend.  Again, the problem seems to multiply.

Most thing that the subject of money and finance is boring.  It is something that does not excite them so the decision is often made to overlook it.  I will admit that it might not be as riveting as the latest reality show on television.  However, there is probably no area more important in your life than the area of money.  The honest truth is we live in a capitalistic society (read money) and it is something that people cannot get away from.  Those who opt to go through life financially unaware are going to be at the mercy of the people who do understand what is going on.  This is a simple fact in life.  The unaware are slaves for those who are aware. 

The rich do get richer.  This is an axiom which is true throughout the ages.  There are a few reasons for this.  To start, as mentioned, they are always focused upon net worth and growing that.  Thus, they acquire assets which become more valuable in time.  The average person acquires items which they have to pay for over time.  In short, the average person finances a car; the wealthy finance a car dealership; one increases wealth while the other decreases it.

Another reason why this is true is for the simple fact the wealthy understand the arena they are operating within: the one of money.  Ironically, everyone is in this game but few take the time to learn the rules.  Most leave their success to chance which often results in failure.  How could one successfully drive if he or she did not understand the rules of the road?  The answer is one would not be able to since his or her license would be revoked.  Yet in the financial arena no such regulations exist.  Nevertheless, there are rules to operate under that only few take the time to learn.

From this point forward, I urge you to begin to concentrate your efforts upon learning what it takes to accumulate wealth.  Begin to read and study this subject.  While it will not be the most exciting reading you ever do, it is monumentally critical to your lifelong success.  We live in a world that revolves around money and that is something you cannot avoid.
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