Money Truths School Didn’t Teach You

June 12, 2024

Money Truths School Didn’t Teach You

MrBigMoney Big Money Mindset, How Big Money Investors Think About Money accountant explains, accounting, budgeting, Escaping the Rat Race: What School Failed to Teach You About Money, finance, financial advice, financial freedom, financial literacy, how to build wealth, how to get rich, how to make money, how to retire early, investing, middle class money traps, money, money lessons, nischa, personal finance, rat race, school failed to teach, school failed to teach about money, school won't teach, the money trap, untold truth about money, wealth 39 Comments

Video Transcript

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here are seven incredibly important money lessons that weren’t taught to us in school number one money is tied to a value there’s this quote by Zig zaga that is you can get everything in life that you want if you will just help enough other people get what they want and by understanding this it really changes your perspective on how to make money we are taught in school and by society that making money is tied to employment what job you have the industry you’re in the job title you have and I had this belief for so many years until very recent I knew that there was a way to make money outside of the regular 95 and what I found very encouraging when I dug into this a bit deeper was that other people far younger than me doing something that I wouldn’t consider as a traditional job seemed to be a lot more fulfilled and making a lot more money than me and that’s when I started to understand that making money or making a lot of money really doesn’t have to be something that happens when you’re in your late 40s 50s or even 60s and you don’t have to follow this linear path to get there instead is to do with how much value you can give that’s money’s true Essence is tied to the value you create and the more people you reach and impact who find Value in what you’re doing the greater your potential to earn and if you look at the world’s most successful people entrepreneurs designers artists they’re solving problems or fulfilling needs on a huge scale don’t think of money just as something that can only come to you through employment if you find ways to provide real value to reach and impact more people you’ll find that money has a way of finding you in direct proportion to the value that you’ve contributed another thing we were never taught at school is to come up with our own point of view throughout our education we’re trained to do things a certain way we’re train to follow instructions to follow rules we’re taught how to think and so even after coming out of school and into the adult world we keep that mindset with us having your own point of view on finances is one of the rarest things out there and because it’s not taught at school we tend to follow what other people are doing assuming that they know better so it makes us feel safe with the decisions that they’re making for us if everyone else is investing in something then maybe we should too if everyone else around us has an upgraded iPhone or a new watch maybe we should buy that too if everyone else seems to be working a 95 then maybe that’s the best option to go down I have my own point of view on these things I haven’t upgraded my Apple watch since 2016 because it works perfectly fine but I will happily spend on a cleaner to buy back some time whereas other people might think that’s a waste of money the point is it doesn’t matter what other people think about your spending and investing it’s about understanding yourself and being confident with your own point of view regardless of what everyone else seems to be doing or thinking the third thing that was never taught in school is that budgeting is freedom if you come across a business that didn’t know how much money it was making what money was coming in or out you’d be wondering how much longer that business would survive for let alone is potential for growth this fundamental principle of tracking finances seems like a no-brainer in the business world it’s essential for growth it’s essential for planning it’s essential for stability but when we shrink this concept down to fit into our personaliz it suddenly become something we want to avoid because many of us see budgeting as a synonym for cutting back and living a life of deprivation rather than the opposite what we want to see budgeting as is something that can help us strategically plan for financial growth and freedom a budget is a thing that lets you say yes to more in life want to put down a deposit on a new home yes you can afford to do that want to go on holiday yes you can afford to do that your budget is the road map that shows you how to get to where you want responsibly and sustainably by the way if you like this video you may also enjoy my free newsletter that comes out every single week I share my lessons from the week my favorite money tips or money stories and I also throw in some of my favorite tools podcasts or books from the week if you want to check out it’s completely free and the link is in the description below the next thing school never taught us is that we should spend on assets before liabilities this concept is explained really well in the book Rich Dad Poor Dad by Robert kosaki and it’s the first time the penny really dropped for me Kaki describes an asset as something that makes you more money while a liability is something that cost you money for example put simply a rental property is an asset because it generates rental income for you while a car is a liability because it requires ongoing maintenance and expenses and payments coming out of your pocket the idea is to at the initial stages of your wealth building Journey Focus heavily on building assets and put the liabilities on hold Investments include stocks bonds real estate they’re all examples of assets that can generate passive income once you’ve built up your assets then you can focus on buying liabilities if you want to but many people a don’t know the difference between the two and B get this the other way around so they end up as soon as they make money spend to get straight away on buying liabilities like cars expensive holidays material possessions before they have built up their assets as a result they’re working for money instead of having money work for them so always buy assets before buying liabilities the next thing school never taught us is that career is your number one money-making tool so find what you love about 90% of my friends are unfulfilled with their jobs and this isn’t uncommon I’ve been there I know what it’s like to work in a job that doesn’t seem to be bringing you anything but a paycheck but there seems to be this new level of expectation that this is the norm the expectation is that you’re not meant to enjoy your job and actually it’s just there to make money so that you can use that money to enjoy things and enjoy life outside of what we’re taught that we need good grades to get a good job or have a good career but we’re not taught that your career is your number one wealth building tool so you may as well take your time to find something that you truly enjoy and that you can stick out for decades to come most people hate their job but they’re paid well or they love their job but they find that it doesn’t pay them well if you could strike a balance between the two even if it means taking a few extra years to explore new things or taking a step sideways instead of forwards you’ll still end up in a really good place one that most people will never reach the sixth thing we aren’t taught at school is how to save money on taxes income tax stands as a UK government’s primary revenue Source according to data from the last tax year the UK government collected 250 billion from income tax alone and then a further 87 billion from corporation tax although we know we have to pay tax we’re definitely not taught how to optimize our income in a way that saves money on taxes different income streams are taxed differently employment income is taxed the heaviest so this is the money that comes through a 95 job working for a salary or working for a paycheck the tax bracket at least in the UK can go up to 45% and that doesn’t even take into account the six figure curse where the effective tax rate you’re paying money that you earn between 00,000 salary and £10,000 is 60% business income is taxed lower than employment income no only are Corporation rates typically lower but you also get to deduct your expenses before you pay tax reducing your tax bill even further and then investment income is usually the most favorable from a tax perspective contributing to a workplace pension gives you tax deductions earning from stocks or Bonds in some cases you aren’t required to pay any tax at all you’re not going to see these favorable tax rules with employment income even a basic understanding of this at school would be helpful or even before entering the adult world but it’s never something that’s going to be taught because it goes against the entire system if you do want to learn more and take this into your own hands I have a video right here on my channel which is about how to save money on taxes in more detail the seventh thing school didn’t teach us is why investing is important if you invest $1,000 in an investment which returns 10% you have the choice to take out the 10% you make every year or to keep it in if you choose to take out and spend that interest every year while keeping your initial $1,000 in you’ll have an extra $100 every year in that case at the end of 30 years you’d have $4,000 in total 1,000 that you’d already put in initially and then an extra $3,000 from the 10% interest you withdrew every year which is the $100 a year times 30 in the second case at the end of the Years you’ll have over $1 17,44 which is over four times what you have in the first case that’s because you’re not only earning interest on your original $1,000 you’re also earning it on the interest you make on that $11,000 every single year as well when it comes to compound interest the number one thing that is working in your favor is how much time you have so the earlier you start the longer you have for compound interest to work in your favor those are seven essential money lessons that school didn’t teach us but should have love to hear from you let me know in the comments which one of these most resonated with you and one thing you’re going to do for yourself after watching this video thank you for watching

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