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Most people have never been educated on how to become "wealthy".
That's because there is no education available in any college
or university that truly teaches us about financial independence.
In fact, our school curriculum has not changed much at all since
its inception at the start of the Industrial Age.
This should be no surprise - after all, the Industrialists who
founded our current education system only intended to teach
us how to become "good employees". If we were kept
poor we would be dependant upon them; if we were dependent upon
them we would be easy to control.
POVERTY
equals
DEPENDENCY
equals
EASE
OF CONTROL
What really separates the poor and middle class from the rich
is Financial Education. If you are willing to seek out this
education, and apply the knowledge you acquire, you too will
become wealthy. It's really that simple.
Let's take the example of "assets" and "liabilities".
We were always led to believe that our homes, cars, registered
investments and cash are ASSETS. The wealthy know better...
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The banks, government, accountants, lawyers, financial planners,
mortgage brokers, fund managers all advise us to "invest"
in these "assets" in order to create wealth, but let's
take a moment to study this.
The wealthy define an asset as something that MAKES you money;
and a liability is something that COSTS you money.
So, does your principal residence count as an asset? Maybe when
you sell it! You make your mortgage payment every month, interest,
property taxes, maintenance - doesn't that sound more like a
liability to you?
How about registered investments such as RRSP's (Registered
Retirement Savings Plan) and IRA's? (Individual Retirement Account).
Aside from a potential initial tax advantage, do the current
rates of return even keep up with inflation? And what about
fees, interest (if you borrowed to maximize your contribution),
the taxes due upon withdrawal?
Inflation will quickly erode the value of your cash; payments,
interest and depreciation will do likewise to your car.
And if you stop making payments, what happens to your "assets"?
They are taken away from you!
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