The Four R's: Reading, Writing, Arithmetic, and Rich
In the current state of the U.S. financial structure, there is an important education that is being lost to children in schools today. This education is financial literacy. Wikipedia describes financial literacy as 'the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turn it into more) and how that person donates it to help others.' Currently, the education system in America teaches children how to balance a checkbook and create a budget. However, this does not provide the skills necessary to manage a successful amount of money.
As the system of saving for retirement has changed from a pension system to a 401K system, people in the work force have to rely on the stock market in order to enjoy their golden years. Personally, retirement is something I think of as a time to enjoy the rest of my life. I do not want to be in a situation where I am struggling to survive because I do not have the income to do it. I also want to rely on my savings to get me through and not put a burden on my family. In order to achieve this goal, I feel that it is necessary to understand the stock market. Please note, I said 'understand' not 'become an expert'. Think of the stock market like picking a college out. If you do not have a basic understanding of that college, how do you know if it will be the right school for you to go to? Similarly, how will you know if you are able to have enough money for retirement if you do not understand the medium in which you will be able to grow your money?
At this point, I hope that I have scared anyone. For me, this is a big concern for my future, and I hope to be able to help as many people as I can achieve a great life for themselves. That being the case, I want to conclude by giving people some easy steps to learn how they can best maximize their retirement. Please note that I am not a financial expert and my advice should be taken into consideration into your own ideas and beliefs. First off, I would suggest doing some research. This may involve finding a book on financial freedom or financial education. Rich Dad, Poor Dad is a great book and talks a lot about financial education. Talk to a financial adviser about your goals for retirement and ways that they can help you to achieve your goals. Personally, I do not use a financial adviser at this point in my life because I want to learn how to best manage my money :). Start somewhere. This can involve getting into a mutual fund or your company's 401K program. The most important thing is to start somewhere. Getting yourself started will initiate the wonderful power of compounding. Compounding means that the longer your money is in an investment vehicle, the more it will grow.
Feel free to comment and ask any questions about money management that you may have. Remember, I am not a financial adviser, but I have done a lot of research on the topic.
