What They Didn't Teach You In School.. I will see you in the next one.#Best Education Page #Online Earning

 How's it going today, guys? Welcome back to the channel.

Hope you're having a great day so far.

So what we're gonna be talking

about in this video today are five

very important financial skills

that are just not being taught in high school.

Now, for those of you that have been following

my channel for quite some time,

I'm sure you've heard all of these different lessons

and it may be a little bit of repetition

here for you, but what I wanna ask

you instead is, if you have a friend

of yours, or maybe a family member,

who doesn't understand these financial skills,

share this video with them, that way

they can start to better-improve

their financial situation and learn some

of these important lessons that are

just not being taught in school.

Now, number one here, in my opinion,

is the most important financial skill

you have to understand in order

to be in good financial health, and that is understanding

how to calculate your personal cashflow.

Now, I know that half of you guys

just zoned out when I said cashflow

because that sounds extremely complicated,

but it's really not, and cashflow is

simply a representation of your income versus your expenses.

So it's very simple to calculate

your cashflow, and I recommend that,

if you're new to this, this is

something you do every single month.

You're gonna take your income,

which for most people is fixed,

every single month and subtract

out your total expenses, and that's going

to tell you whether or not you have positive cashflow,

which means that you're making

more money than you're spending,

or if you have negative cashflow,

which means you're spending more money than you are making.

And as I'm sure you guys know,

we have massive spending problems here in the United States.

Most people are in debt.

I know there's some crazy statistics

out there about the debt in this country

and these poor spending habits,

and a lot of it comes down to this fundamental understanding

of personal cashflow.

So that is the very first skill,

or very first step, to improving

your financial health, is understanding

your personal cashflow and calculating

this on a monthly basis.

So once you've calculated your personal cashflow,

what is the next step here, or the next skill?

Skill number two is being able to understand the difference

between discretionary versus nondiscretionary spending,

and this is very easy to understand.

Discretionary spending is something you have control over.

You decide whether or not you want to spend that money.

It is a want.

And nondiscretionary spending is money

you have to spend regardless,

and that is what you call a need.

And so what you're going to do,

let's say, for example, you calculate

your personal cashflow and you find

out that you're spending more than

you're earning every month, well,

you're gonna have to cut down on

your expenses, and now you're gonna have

to analyze these items and figure

out what are your discretionary and nondiscretionary items.

So let's go through a couple of examples here.

Your utility bill is a nondiscretionary expense

because if you don't pay that,

you're not gonna have hot water

and you're not gonna have electricity.

Your rent or your mortgage, that's nondiscretionary

because you need to pay these things

or you're not going to have housing.

Taco Bell, that's a discretionary expense

because that is a want and it's not a need.

Michael Kors.

A lot of people are gonna tell

you that's a need, but it's actually a want.

I can assure you of that.

Groceries can be nondiscretionary

or discretionary 'cause if you're going

out to stores and you're buying name-brand stuff,

that's a want.

That's not a need.

But if you're just buying cheap groceries

and the essentials, that can be a nondiscretionary item.

And then car insurance is another example

of a nondiscretionary spending item,

something you have to pay for,

otherwise you're not gonna have transportation to work.

You're not gonna be able to make any money.

So that is step number two, or skill number two,

that you have to learn, is itemizing

your monthly expenses and figuring

out which ones are discretionary,

which ones are nondiscretionary,

and then if you need to make some cuts,

you're gonna get rid of some of

these discretionary expense items,

things that you're spending money on,

the wants in your life.

Number three, the third skill you have to learn,

and this is a very easy one that comes

from the book, Rich Dad Poor Dad.

If you guys have not read that book,

I would highly recommend it.

I'll link it up in the description below.

This is understanding the difference

between assets versus liabilities.

Now, there's all kinds of different definitions

out there of assets versus liabilities,

but I tend to follow what Robert Kiyosaki says.

It's a very simple reasoning.

Assets put money in your pocket.

Liabilities take money out.

And so what you wanna do is look

at the different things in your life

and determine whether or not this is an asset

or a liability, and of course you wanna be buying assets.

You wanna be buying things that are gonna continue

to put money back into your pocket.

So just to give you guys a couple

of examples here, a rental property

that you might buy and rent out,

that's an asset because it's putting money in your pocket.

Your car, your boat, your RV, that's all liabilities

because it's taking money out of

your pocket every single month,

in terms of maintenance or your payments on these things.

Stocks, bonds, even old coins,

those are all assets because they tend to go up in value.

And then one that a lot of people argue

on is your single-family home.

The home that you live in, according

to Robert Kiyosaki, is in fact a liability

because it's taking money out of your pocket.

And anybody who disagrees with me

on that, let me know the last time

that your house put money in your pocket.

Yes, you are building equity and it's better

than renting, but it's certainly

not an asset like a rental property can be.

And so once you understand assets versus liabilities,

what you wanna do is begin buying

more assets and look at the liabilities

in your life and determine whether

or not you need these things.

Number four, the fourth thing I wanna point

out here, this isn't necessarily a skill,

but it's a lesson and it's something

I'm hearing a lot about right now,

and that is people who are talking

about their tax refunds and how happy

they are about their refund.

And I'm about to basically burst

your bubble here on tax refunds.

People don't understand that a tax return,

or a refund, is literally just getting money

back that you overpaid to the government.

And when we go over number five here,

this is actually going to get a little bit scary

because you essentially are giving the government

an interest-free loan where you could've been putting

that money somewhere, protecting your money from inflation,

which is gonna be number five on our list here.

And a friend of mine gave me a perfect example

here I can use when talking about a tax return.

And so let me walk you guys through that scenario.

Let's say every single week you go

to a grocery store and you pay for your groceries.

On Sundays, you go buy your groceries and you pay them.

Let's say at the end of the year

that grocery store said, "Hey, guess what?

"Based on the groceries that you purchased,

"you actually overpaid us by $200.

"Well, here's your money back."

Would you be as excited about that?

My guess is probably not because

it was your money to begin with

that you gave them, and then they're

just giving it back to you.

That's exactly what happens with the tax refund is,

you're overpaying the government,

and as a result, they're giving

you back your money that you gave

to them as an interest-free loan.

Now, there's two schools of thought with this.

Number one, it is kind of a deferred savings plan,

and if you are smart with your tax refund

and you put it towards paying down debt

or roll it into some kind of retirement account,

I'm all for that.

But if you're smart with your money

and you're able to separate out that money,

you could actually put that somewhere

and be earning a return on that,

as opposed to giving the government a 0%,

interest-free loan.

And one of the best options we're gonna talk

about are these online savings accounts

that have interest rates in the neighborhood

of 2% or more, as opposed to earning nothing.

So number four, understanding the principle

behind the tax refund, is huge for people,

and it really puts you in the right mindset

of what your goals should be, financially,

because what you're gonna find is a lot

of people that get excited over tax returns don't understand

how any of these systems work,

and when you realize that it's

literally just money that you overpaid being given

back to you, it's a little bit less exciting.

And then number five, the fifth skill

or lesson that you have to learn here,

is that savers are losers at the end of the day.

Now, saving money is still, in my opinion,

always better than spending money,

but what you do with that money is

extremely important because of something called inflation.

And inflation is essentially an increase

in the price of goods and services

over time or a deterioration in the buying power

of your money, and on average, it's around 2% per year.

And so people who put money

into a traditional checking account

or savings account often have an APY,

or interest rate, of 0.05%, which is absolutely terrible.

I did a video the other day on five secrets

that the banks don't want you to know.

If you guys wanna learn more about

what goes on behind the scenes

of the banking industry, I'll link

up to that in the description below.

But this is one of the secrets here,

is that you're losing money every single year

by leaving it in a traditional bank account.

And in most cases, if you have a 0.05% yield,

you're losing about 1.95% of

your buying power every single year

by saving that money in a bank.

Now, there are some other options out there.

There's the CD, the certificate of deposit.

There are online bank accounts like Ally,

or other different ones out there,

that offer much better rates.

And so if you are looking to protect the buying power

of your money, I would definitely recommend looking

into one of those options.

But anyways, guys, that's gonna wrap up this video.

These are the five most important financial skills

or lessons that you're just not learning in school,

and if you don't learn these things early on,

they could have a huge impact on

your financial health for decades to follow.

So if you guys know somebody who needs

to learn these lessons, please share

this video with them and help spread

this message here of improving

your financial situation and some learning

that goes above and beyond what is taught in high school.

But thanks so much for watching.

I hope you enjoyed this video and

I will see you in the next one.

#Best Education Page #Online Earning

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