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Are you getting what you needed from schools?



    Are you getting what you needed from schools?




    This question was first taken up by Robert T. Kiyosaki in his book, ‘Rich Dad Poor Dad’. He said, ‘We are getting all sort of education in schools except for money. That’s why today everyone is in a rat race. What type of rat race? When I talk to anyone, their major part of talking is about their loans, bills etc. and most of them belong to employee category. They are fed up with their jobs. And when I ask them why, they say, ‘they have less pay’. Actually, they do not have less pay but they are financially illiterate, because they are not taught about money in the schools.

    To get deeper into this, I interviewed a person, working as an employee in a big private firm. He said, ‘When I started my job in the firm, my pay was of ₹20k p.m. I was hardly able to cover up my own personal needs. I wanted an increment that time. After slight increment every year, my pay reached ₹40k after 6 years. That time I got married. Now ₹40k was not enough for my wife and me to cover up our expenses.’ And even now when that person has a pay scale of ₹150k per month, still he is hardly left with something after paying for home loans, car loans, credit card bills, electricity and water bills, school fees etc. And now he is stick to his job. Since, there is no chance in leaving the job now. He has been trapped in a rat race. And every one of us who are financially illiterate is trapped in this rat race. We do not know, how to manage money effectively and efficiently.

    To save ourselves from getting into such rat race, we have two options. Firstly, to set up a business. The second one is for those who just want to do a 9 to 5 job.


    The startup option

    By doing business you are working for yourself, & major share of profit is yours. Here, by the term business I does not mean self-employed. A business having minimum 50 employees can be best described here. By involving into your business you work making money for yourself and also let your money work for you. Rather, filling up the pockets of your bosses. And major part of profit you earn gets reinvested which grows your business to such an extent that you become financially free .i.e. if you leave working your business automatically generates enough amount to cover up all yours and your family’s needs till lifetime,

    The other thing you can prefer is to become an investor. Note that investor here does not mean only casual buyer and seller in the stock market, but a whole time devotee in stock market.


    The job option

    The second option, how to become financially free while doing the job. Simple, just acquire assets and minimize your liabilities. Now the question arises what is an asset and what is liability. In non-technical terms, Asset is something which generates income & Liability is something which takes out income from our pocket. Now people say, ‘they have their house as their asset.’ But this is the biggest myth. The house is our biggest liability. Why? Because your house has major outflows from income like loan repayment, electricity and water bill.

    Now how to acquire assets and what type of assets is to be acquired. Assets include, business that does not require your presence, stocks, bonds, income generating real estate, royalty from intellectual property etc. After acquiring enough income generating assets that income from those covers your all needs, you become financially free. I know a person, he is in connection with many advocates and banks that’s why he got offers from them for disputed real estates which he gets at a price 20 to 40 percent lower from market price & sold it after 60 to 90 days at higher than market price. Hence, earning a great profit. And he does all this along with his job.



    Some people keep their money in bank savings account, thinking they have invested their money. But their eyes are close because the interest income is not certain i.e. today it is 4% but who knows what it will be tomorrow and also about depreciation of currency. Who knows what will be the value of your savings tomorrow. The inflation rate in India is 10% and interest rate is just 4% which implies interest rate actually in India is -6%(-ve). That’s why interest rates in other countries are low and even zero or negative. I know some people who have paper companies i.e. not physically established but only their presence is just in papers which help owners to cut their tax rate to lower percentage. How? Since owners charge most of the expenses to the company and pay taxes after that. This is also an example of financial literacy. This implies middle classes are paying more taxes than richer classes.

    By just not getting financially educated our whole life becomes sacrificial. But we can financially educate ourselves by reading some books on finance attending some courses on financial management. But at last this knowledge should be injected from root i.e. from school.

    Financial literacy makes the difference.




    Written by- Vaibhav bhatia

    Ca student