Why Financial Education Is Your Best Investment

Financial education or financial literacy is the availability of the set of skills and knowledge that allows one make informed decisions with all financial resources available to him or her.

A common question that gets asked a lot, is if the richest men in the world would be regarded as poor if they lost all their investments. “Will Dangote suddenly be a poor man if he lost all his money?” The answer is No.

And the reason why, is that he has the knowledge required to not only avoid extreme situations as this, but also because he has the required bank of knowledge and experience to consistently earn money.

Education in any form, precedes the wealth that can potentially arise from it and when it comes to investing and building wealth, nothing trumps your financial education.

Financial education or financial literacy is the availability of the set of skills and knowledge that allows one make informed decisions with all financial resources available to him or her. For the most part, it isn’t something we are taught in school, but it is something that can make or mar everything we were taught.

A way to look at it is that you cannot be wealthier than your level of financial intelligence. As such, the only way to sustain an increased growth in financial strength, is to increase your financial literacy thereby raising the bar on what you can achieve financially.

Much like your investments, your financial intelligence rises with how much time, money and effort goes into investing in it. Moreso, is doesn’t just grow; it has a multiplicative effect as the result of one additional, marginal piece of knowledge can open a wider realm of investment possibilities, up to you.

Needless to say, it is one of the great investment bargains you can make because it costs little (ignorance costs way more), has no risk (not unless you are consuming information from wrong sources or simply consuming wrong information in the first place), and has impeccably huge rewards. It’s the best investment you can make.

Financial education is why you have the capacity to earn in the first place. It is also financial education that propels you to invest in your future, to plan according to your life’s objective, or to even save at all.

It is what tells you to carry out due diligence before jumping at any investment advice or choosing to take risks on an investment. It is what shows you the difference between investing and gambling and reveals the only way to consistently make smart investment decisions.

It also gives you the tools required to build a unique financial/ investment plan that matches your goals, values, skills, and resources.

More exciting reasons are that it provides the kind of wealth that nobody can take from you – the kind you cannot lose. You will also not lose it because it shows you how to avoid making fatal investment mistakes.

Finally, it expands your earning potential, increases your return on investment and sets you on a life’s journey where every experience adds to your growth. Therefore, your ultimate investment goal should be on how to constantly seek ways to increase your financial education/ literacy.

Written by Lawretta Egba.