This question
has dazzled my mind ever since I was 17. Is education the missing link to
accumulate wealth? And if so, why are there so many self-made millionaires who
are either college drop outs or even high school drop outs and at the same
time, so many college educated professionals with financial difficulties or
even facing bankruptcy? Is college necessary to be successful in life?
In my
senior year of high school, I realized there was something wrong with the
system. Schools will teach pre calc, chemistry, biology but don’t teach “financial
literacy”. Students come out with the knowledge of how to write an essay, but don’t
know how to do their own taxes. We have been taught to save money, but never to
invest.
Somehow 16 to 18 year old kids are being asked to make
100,000 dollar debt decisions when going to university, they are not prepared
for that, they don’t know what they are getting themselves into, they just
assume that after paying for 4 years of education, as soon as they “come out
the other side” they’ll somehow pay it back. In most cases this is not how it
goes. It does not matter if you are working in your career field or making
minimum wage at a supermarket, you are still required to pay off college debt. Parents
and students see college as an insurance policy, a big expensive insurance so
that students don’t fall through the big cracks in our society.
Society
guides us to what they nominate “financial independency”. What many people don’t
realize is that there is a big difference between financial independency,
financial stability and financial freedom. Financial Independency is easily acquired,
as soon as an individual no longer depends financially of someone, he or she has
acquired financial independency. You can be working for minimum wage, BROKE,
but still independent. While many people
think they want financial independency, they are actually looking for financial
stability. Financial stability is when the earned income is greater than the
expenses generated. In other words I am in a well-paying job, with benefits, I can
pay rent or mortgage, pay a car quote and have money for other expenses. The problem
is: life is not a stable cycle and the US economy is not a stable cycle. Perusing
Financial Stability in a world that is not stable is very complicated if not
impossible. What society fails to teach us is about financial freedom. Financial
freedom is when an individual’s passive income (not earned income) covers the
expenses. To further explain this, passive income is income that is generated
by an asset. An asset is usually an investment, money producing you money. The main
benefit of acquiring financial freedom is that you are more likely to not be
heavily affected by an economy recession, because of your multiple sources of
income (earned income, passive income, residual income etc).
With all
this information, you may be asking? How can I acquire assets if I’m just a
student? Do I need a lot of money to invest? Am I too young to invest? Now a days there are many ways to start investing with as little as $100 or starting business with less than $500. Thanks to the internet, most of business are now run online. Here are a few examples of how you can invest while still being a college student: selling things on E-bay, buying things from china and selling through amazon without having to travel. Having your own YouTube channel with great content and enough likes to generate passive income. While it may be true that you need a couple thousands to invest in the stock market, you can also explore other markets like the currency market (Forex) where you can invest as little as $100 and grow the account with compound interest. There are even automatic apps like "Acorn" that let you invest small amounts of money into the stock market. You do not need to be great to start, but you have to START to be great.
