What is Financial Literacy?

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In the money world,

The term “financially literate”— or a related derivative—gets tossed around quite a bit. Not a whole lot of experts actually take the time to define exactly what financially literate means, leaving many statistics related to money habits void of their importance. Kids especially need a definition as they learn how to handle funds, because without it, they don’t know if they’ve reached the goals you want them to hit.

On the most basic level,

Financial literacy is simply about being knowledgeable. It means that you understand fundamental facts about money, such as the value of cash coins or bills. You also grasp standards and routine practices, such as the fact modern people generally pay for things with plastic (debit or credit card). With this information, you are able to follow most everyday conversations about money.

Research studies across,

Countries on financial literacy have shown that most individuals (including entrepreneurs) don’t understand the concept of compound interest and some consumers don’t actively seek out financial information before making financial decisions. Most financial consumers lack the ability to choose and manage a credit card efficiently, and lack of financial literacy education is responsible for lack of money management skills and financial planning for business and retirement.

Most potential retirees lack information about saving and investing for retirement. Many people fail to plan ahead and they take on financial risks without realizing it. Problems of debt are severe for a large proportion of the population because of financial illiteracy. Youth on average are less financially capable than their elders.

Financial education,

Benefit consumers of all ages and income levels. For young adults just beginning their working lives, it can provide basic tools for budgeting and saving so that expenses and debt can be kept controlled. Financial education can help families acquire the discipline to save for their own home and/or for their children’s education. It can help older workers ensure that they have enough savings for a comfortable retirement by providing them with the information and skills to make wise investment choices with their individual pension and savings plans. Financial education can help low-income people make the most of what they are able to save and help them avoid the high cost charged for financial transactions by non-financial institutions.

Decades ago, 

when it was considered bad manners to discuss money matters with others and many people didn’t even finish elementary school, people didn’t seem to have trouble grasping the basics of money management. People understood very clearly the need to live within their means and save for the future; not just because they lived in a cash-based society where solvency was admired and debt was frowned upon, but also because they had no real alternatives. When you’re paid in cash and you have no credit options available to you, the choice is pretty simple: you either live within your means or you go without.

Fear is a powerful motivator and, while I’m sure that there were plenty of people living pay cheque to pay cheque, I’m willing to bet that there were plenty more living within their means and building solid financial foundations in order to make sure they didn’t run out of cash. Then, in the 1980’s and 90’s, with the introduction of credit cards, an alternative approach to money emerged. Credit gave people the option of an easier path that removed the need to save and live within their means and offered them the opportunity to purchase experiences and products that might otherwise have been out of reach. It’s a tempting offer, and one that proved hard to resist. Human beings are hard-wired for pleasure and it

takes a greater degree of willpower and motivation to take the fiscally responsible path rather than the fun and easy one. Not surprisingly, as credit became more readily available and more socially acceptable, there was a steep decline in the amount people were saving and a sharp increase in the amount of debt they were carrying.

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5 Financial Lessons From bahubali 2

Two years ago, Director SS Rajamouli did not just make a film but a world of its own. Baahubali is received huge appreciations from everyone. Every section of the audience had dream to see this film on the first day of itself. Movies often teach us a good lesson which are rarely taught in our B-school. Recently released legendary movie Bahubali 2 is creating milestones on the Box Office. But besides these Box Office Collection, the movie teaches us many Financial Lessons. It is just we need to have an open mind to understand and incorporate them in our day to day life.

Hope you find some business lessons from the Bahubali movie valuable and it may also help you attain success in the financial market. 

Here are some financial lessons that every investor learn.

The waiting game eventually pays off.

Baahubali forfeits his right to the throne but never loses sight of the kingdom. It took two generations to finally gain the kingdom. Similarly in the field of investing, the waiting game eventually pays off

Spend Big To Earn Big

Baahubali pays a huge price throughout his life. He forfeits the throne. He also gives up a life of luxury to live among the commoners. Eventually, he also gives up his own life. While investing the same principles hold true as Most of us tend to trade and invest without understanding the actual costs and the opportunity costs. We hold on to our investments for a long time and get out at the wrong time.

When to be greedy and when not

Bahubali’s brother Bhallaldeva cherish a dream to become the king, however he was more driven by wrong greed. investors should know when to be greedy and when to be fearful.

Hope you find some business lessons from the Bahubali movie valuable and it may also help you attain success in the financial market. If you are finding difficulty to attain success in the financial market. 

We at Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our India’s best Free Advisory Service.

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You Don’t Need Superstars

Baahubali proved that you do not need big stars to create a blockbuster movie. That is true of your portfolio too. You need star potential; not just superstars in your investment portfolio.

You make also like : Inspiring life lessons from dangal

Add creativity to your advantage

Bhallaldeva strategically acquires the powerful arms and weapons while Bahubali was left with weak tools and armoury. While everybody wondered that how can Bahubali even stand against the Bhallaldeva’s strong and powerful troop? He came out with a unique solution where he used oiled cloth to kill his opponent by fire. So Bahubali basically used limited tools as an opportunity to become creative rather than an excuse. Someone has rightly said-

In the same way, we might not possess all the resources to achieve our goal in life, but if we use it diligently, we can still reach our targets with limited resource. For example, as a trader it’s not mandatory to possess hi-fi software and screeners to analyse your trade, rather the experienced traders often use simple price chart, volume, trend lines, support-resistance or other simple tools to analyze their trade.

In simple words, all you require is sound knowledge of the subject and the creativity to use it diligently.

Importance of Financial Literacy For kids

Financial literacy for kids is about ensuring that your child is educated on the best way to manage finances. This is a way of securing their future. This is because they will be able to learn how to manage money in all ways possible. This helps them spend wisely at all times.

Kids now a days get aspired to be astronauts, scientists or entrepreneurs.

No matter what they become when they grow up — a computer whiz, talented artist, gifted surgeon or a competent lawyer — Financial Literacy for kids is important as it prepares the toddler for a brighter financial prospect. It is the duty of every parent to make sure that their children have adequate knowledge on cash matters. Good monetary literacy will help your child to have a good understanding and awareness of cash 

But the challenge for parents is in familiarising children with ideas such as inflation and insurance, without boring them to tears with our usual rants?

Parents can share real time example so that they don’t get bored. You can show them youtube videos relating to finances.

Do you want your kids to be financial independence? We at Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our Free financial Advisory Service.we are not a seller of any financial products. We only provide FREE financial advice so that you are not mis-guided while buying any kind of financial products. 

Take inflation, for instance.

Prices of products and services going up over time is something we can make our children understand. This is the foundation for many other concepts such as supply and demand, interest rate and the need for savings.

The story of rahul a maid in Bengaluru, is used to introduce this idea The old lady he works for plans a birthday party for her grandson and buys goodies such as chocolate cake, toys and new clothes. When she casually mentions the price she paid for these, Mani is shocked; just six years ago he had bought these items at bargain prices.

He thinks someone had fleeced her, but she explains how prices go up over time and that is normal.

This fact gets rahul worried, as the cash he has been stashing in a bag under his bed may not be enough for the more expensive future.

Grandma explains the idea of getting money to grow and decides to keep his money in the bank to earn interest.

No rocket science here, but the story repeats the price increase in different products — all of them of interest to children — to ensure that the point is made.

And rather than preach economics, it moves on to the practical question of how price increases can impact you adversely and what you can do about it. Putting aside money for a rainy day is another life lesson and a habit that can be taught early.

Introducing insurance

Sufficient savings may not be feasible for many situations and some risk mitigation ideas are needed. Insurance is explained through a clever and time-tested story-in-a-story (one and a half stories) format, bringing old-world kings and jungle robbers along with car and health insurance.

A precious crown is to be made for a king, but there is the risk that a dacoit in the jungle may strike when it is transported. A clever lady suggests a deal to the goldsmith — deposit 20 coins and she will pay back the 200 coins it took to make the crown in case it is stolen. This backdrop is used to explain modern day insurance products, with a new product idea of toy insurance thrown in.