Your Financial Education
Financial education is the second hidden key to wealth. Most people who are serious about achieving financial independence recognize the important of acquiring knowledge in their chosen financial vehicle.
The consequences of ignoring or glossing over this step are well-documented.
The Financial Education Process
- The majority of stock market traders lose their investment capital within the first 12 months of trading. Some investors enjoy initial success, only to give most of the money back to the market in subsequent trades. Then there are the punters who buy at market tops, hang onto their plummeting shares in hopes of a recovery, and finally sell for a dramatic loss at the bottom.
- A significant number of real estate investors get caught out buying overpriced properties in overheated markets. Uninformed buyers purchase property in the wrong location, at the wrong price, and at the wrong time. Occasionally dumb luck intervenes and a developer makes a generous offer for the property because he's earmarked the site for a new project. But this may come after decades of renting out the premises at a loss.
- The rate of small business failure is legendary. Many small business owners imagine their new businesses will succeed because they are experts in a particular trade or profession. What they fail to understand is that they must now master the mechanics of running a business (accounting, management, advertising and customer relations) or hire staff with the relevant expertise.
Financial education can be divided into two phases:
Phase 1: Preliminary Research
If you don't already have a money vehicle in mind, your first step is to do an overview of the various vehicles and decide which one appeals to you. The word 'appeal' is important, because this is about your emotional response, which is far more motivating than a generalised goal of making money.
The 3 Money Vehicles
There are three key areas in which to create wealth and they each require a different set of psychological resources and financial skills.
The three vehicles are:
- your own business
- the stock market
- real estate
You can learn more about these on the Money Vehicles page.
If you've already chosen a vehicle you can skip this section and move on to Phase 2.
If you're new to wealth creation or you're in the process of starting over, this is the time to do general research into businesses, the stock market or property.
Here are four ways to get started:
The bottom line is: would you enjoy focusing on this subject for 20-40 hours each week? Only you can decide if that sounds appealing or if you'd rather wait tables.
- Talk to several people who are successful in each area.
Does their daily routine appeal to you?
Does their level of success justify the hours they devote to this activity?
Can you imagine yourself in their position (and enjoying it)?
Are they a worthy role model?
- Read one or two books on each subject.
Does any one interest or excite you?
Or read Robert G. Allen's book, Multiple Streams of Income, for an overview of all three money vehicles.
- Attend any free or low-cost introductory financial seminars in your area. These are usually sales pitches to get you to attend a $3,000 weekend workshop or buy their expensive software package, but you should get a good 'feel' for the subject from the introductory event.
- Read relevant newspaper articles and industry magazines.
Phase 2: Preparatory Study
This is where you choose your direction and commit to becoming a master at it.
The first skill you need to develop at this stage is the ability to make good decisions.
To aid in the decision-making process, many people create a two-columned sheet of paper with 'PRO' on one side and 'CON' on the other. You can do this for each of the three money vehicles and their sub-categories.
There are several points to keep in mind while you do this:
- Your life purpose: How does your vehicle fit in with that? Does it get you where you want to go? Or is it a stepping-stone?
- Your goals: Is this the best vehicle to help you achieve them?
- Your personality: Does this suit who you are? Does this suit who you want to be?
The Power of Decisions
Once you've made your decision, you'll begin to discover the magic of being congruent. Congruency means that all parts of your personality are in alignment or agreement about your decision. When there are no warring parts pulling in opposing directions, your focus becomes like a laser beam. Not only does this aid you in completing all the necessary tasks, it also attracts other people and events into your life that assist you in reaching your goal. You'll notice more 'coincidences' occurring with regard to your new direction.
Aids to Study
If your money vehicle is a new area for you, you'll need to master the subject. If you've chosen well, this won't be a chore, as you'll find yourself excited and/or fascinated by what you're learning.
This is also a good time to look for a support group, because you'll most likely meet other people who have expertise in the areas you're studying. You can swap information and get help on topics you're unclear about. Playing the Cashflow® game also makes the money vehicles concept come alive. It's a way to take action safely and it's more fun than paper trading.
- You'll need to schedule your study periods, and the best way to do that is to set aside a block of time, make it a priority, and fit other things around it. Naturally your family will come first, so you may need to schedule specific periods of family time as well.
Click here for a list of excellent study materials in each of the three areas.
- The next step is to take a course or workshop. Use your reading to select a role model, study his or her methods, and take a course from him or her if one is available. The presenter should be someone whose success you'd like to duplicate.
The real benefits of going to a live workshop are motivational. For this reason, it's sometimes better to postpone attending until you've chosen your vehicle and you're in the position to start taking action. See the article on workshops for more on this subject.
Essentially your financial education should be an ongoing activity, so you need to know when you've learned enough to take your first action steps. Strictly speaking, learning is an action step in itself, but we're talking about action in terms of interacting with the world at large.
You should have a sense of when you've learned enough to take action, just as you sense when you're procrastinating. If you find you're avoiding taking that first (or next) step, go back to the wealth mindset techniques and select one to work with. Also make sure you break down your action steps into the smallest ones possible, then do those one at a time. The purpose is to build momentum, which then develops a life of its own. And if, at any stage, your motivation flags, you'll know what to do to get it going again.
Your Next Step:
- The best way to learn how to become a millionaire is to study the strategies of someone who's already achieved that goal.
We've had the privilege of studying with two mentors who went from broke to millionaire in less than four years:
- Paul Counsel was a successful but financially strapped artist when he decided to become financially free. You can learn how to duplicate his strategies by visiting
The Infinite Wealth Trilogy.
- Jamie McIntyre was hopelessly in debt when he discovered a system that made him a millionaire before the age of twenty-five. Jamie offers free DVDs on his strategies at
Universal Wealth Creation.
- Browse the Financial Resources page for a list of our recommended reading.
- Go to the Financial Plan page to set up an automatic system to begin amassing wealth.
- Visit the Amazon web site for additional books on financial freedom:
(If the Amazon box doesn't display any book titles, just click on your browser's "Refresh" button)
Disclaimer: This site is purely educational and we make no claims or guarantees with regard to the information presented. Please consult a certified NLP practitioner for individual coaching in the use of NLP techniques. We strongly advise consulting a financial industry professional before embarking on a wealth creation journey.
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