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Last Updated on April 13, 2017 by Marie Bautista
expensive… try ignorance.”
are the ones you have no idea you’re making. When it comes to financial education, it is easier to prefer “free” ignorance over having to pay for
education. The consequence of this is a short-term gain (savings) with a
long-term pain (bad financial decisions).
In this article, my goal is to
simply share with you the 3 biggest and most expensive costs of ignorance. It’s
listed down in order of increasing gravity. As you further go down the list,
the costs are going to get more and more painful. And honestly, I started
writing this article not knowing how “costly” ignorance is… but now that I’m
done with it, it’s actually pretty scary. With that said, let’s get started!
Investing in Depreciating Assets
reduction in value of the product or service we paid for over time. The food we
eat is instantly depreciated the moment we eat it. A cell phone is fully
depreciated within 3 years of its purchase. A brand new car immediately loses a
significant amount of its value the moment you drive it and decays over 10
years. Different things have different ‘depreciation’ periods.
depreciate or appreciate. And if everything you own depreciates, then you are
very sick financially. It means that becoming wealthy will be extremely
difficult because everything you own is slowly using its value. Imagine
trying to go up in an escalator that’s going down — this is the same situation
of trying to become wealthy while accumulating too much depreciating assets.
things: (1) increase your ability to earn or (2) increase in value over time.
If the answer to both questions are no, then it’s not an investment but simply
a long-term expense.
is not really a bad or good thing. It’s just a fact of life (and accounting).
Depreciation however, becomes dangerous when you think what you’re buying is an investment,
when it’s really just an long-term delayed expense.
mix of assets that appreciate and some that you would really need to use in
your life. And at the very core of it, how can you tell what investments are
good for you? The answer is financial education.
Entering Bad Deals (and Being Afraid of Good Ones)
scams. The second is staying away from
REAL and GOOD opportunities. Let’s take
on the scam part first.
familiar with the typical scam story.
Hard-working employee gets invited to invest into a business that
promises high-returns without much effort.
Friends and family encourage him to do so, because they have made money
in it. The employee invests his life
savings into it. The rest is history –
company turns out to be a scam, and all the money is lost.
AmanFutures, Enron, Madoff Investment.
Thousands of Filipinos losing millions of pesos. And frankly, these kinds of bad deals and
investments will ALWAYS be there. No
matter how strict or thorough the government becomes, scams will always be
there. The only way to stop being
scammed is to get educated and learn what kinds of businesses and investments
are actually legal, moral, ethical, and sustainable.
of asking, “Is ____a good
“what is it that makes a good investment and
question is how do I add numbers?)
personally, scams are OK since at least you learn from it. And you can always earn back the money. The dangerous part about scams is exactly
WHAT you’ll learn about it. You could
learn in a positive way, wherein you educate yourself more on the topic on why
it failed. OR you could learn in a
negative way and simply SHUT OUT all possible opportunities (even the good
ones). This is where the second part
closed themselves to ALL forms of opportunities. This is where you will hear conversations
in the stock market and some network marketing companies are actually scams. But the only way you’ll be able to distinguish them and actually be
successful is if you EDUCATE yourself financially. Learn the answers to the following questions
- What do I need to know in order
to make money in the market?
- What is it that separates a good
network marketing company from a bad one?
- What do I need to develop (with
myself) so I can succeed in X business opportunity?
everyone will ‘give their best’. The big
question that actually separates the first place from the rest is how well they
prepared (weeks, months and years) BEFORE the judgment day itself. Financial opportunities work in the same
way Everyone wants to HAVE them, but
only a few are actually able to take advantage. Think of the following scenarios:
It’s really painful to have to miss an opportunity
because you were unprepared. Because
usually one single opportunity can lead to a few more, and those few will lead
to a lot more. Now in general, there are
3 resources that you should always continue to build: (1) Your Money, (2) Your
Skills, and (3) Your Network.
Lacking money, skills and good network
is a huge barrier to success. And right
now, you can choose to make this an excuse or make it a motivator.
If you don’t have P5,000 to start
investing, which of the two lines will you say:
Now, this article has become pretty
lengthy already, so we’ll end it here.
I’m sure you already get the picture of what you’re paying for due to
ignorance. But before we end, I have
some bad news for you: Reading this
article won’t really help you financially.
There is still a lot more to learn, but the good thing is now you know
WHY you have to learn them. Seek
financial education, and great financial results will follow.
Education may cost you something a
little extra. A good book on financial
education ranges from P500 to P2,000.
Seminars will cost from
P1,000 to P5,000. Business courses will cost P10,000 to
P50,000. But these are very small prices
to pay when you compare them to the cost of ignorance.
So make it a point to gain financial
education. Being ignorant is like being
sick with a dreaded illness, whose only viable cure is financial
education. Heal yourself, pay for your
medicine. Get financially educated.
You can join J3 on his premium online seminar called the “Game of Wealth. “
You will get online access to 7 plus hours worth of video training on
how to win the game of wealth.
TrulyRichClub.com – Do You Want to Gain Financial Wealth and Spiritual Abundance at the Same Time?
J3 and I are also being mentored by Bo Sanchez. First time to invest in the stock market? It is normal to get scared. But it is also important to have somebody more knowledgeable GUIDE you. Join us here and learn how to be TRULY RICH.