What They Don’t Teach In Schools

Schools are the place where we learn different professional skills and gain knowledge about the world. However, the school doesn’t teach us real-world skills that almost every individual needs to survive in a money-driven world.
School teaches us how to earn money, but not how to manage money, and let alone how to do our taxes. It doesn’t teach you to buy a car, how you will be buying your first home as an investment, or how to grow your wealth.

Meet Rich Dad Poor Dad

In the book ‘Rich Dad Poor Dad’ by Robert Kiyosaki, it’s written that “A person can be highly educated, professionally successful and financially illiterate”. This line states that you can be highly educated and earn a lot of money but if you don’t know how to handle your finances, you cannot grow your money.
Before moving on to how we can put money in different places to earn returns like by buying your first investment property in Sydney, let’s first know more about money management.

Does Money Control You Or Do You Control Money?

What exactly is money management? Is it how one earns money, or how one spends money, or how one saves money? Yes, it includes all of these but, money management is not limited to earning and spending money.
It is investing our saved money wisely and earning gains. It is making our money work for us, not us working for money. Using money for buying stocks, or for buying an investment property, are examples of making money.
Money management requires knowledge of handling personal finance. A financial study includes accounting, financing arrangement, and business structure but not personal finances. Let’s understand the meaning of investing before making investment decisions.

What Exactly Is Investing All About?

Investing means using our savings in such a way that it generates a certain amount of profit. Investing is a crucial part of finance management. It also defines other aspects of financing. For one to have financial intelligence, he/she requires knowledge in the following areas.

• • Accounting
  • Investing
  • Understanding markets
  • The law

Knowledge about assets building and reducing liabilities is essential for every individual to increase his/her wealth. Everyone who knows how to manage money and where to invest for getting maximum returns is an investor.

Investing In The Right Assets

Before putting money in different places, one has to prepare a proper investment portfolio. This ensures the overall securities of the funds. Diversifying our funds will divide total risk and minimize individual losses.

1. Buying A First Home As An Investment

Everyone wishes to have their own house. However, investment in residential property is not limited to self-use. One can earn regular income by renting out property.

But before investing one has to find the best place to buy the first house, analyze the future valuation of the house and consider factors like can I rent out my first house or can I put it on sale for capital gains.

Moreover, property value is increasing day by day, and selling what you buy ten years from now will earn your profits by huge margins.

2. Buying Investment Property

Investing in real estate helps to earn returns in the form of rental income. You can consider buying an investment property before your first home. The cost of buying land is less than the cost of buying a unit.

These properties can be used for different purposes like building apartments or complexes or for the construction of commercial buildings. Returns earned from these investments are very high.

3. Investing In Stocks

By buying stocks of a company one gets some ownership rights of that company. An individual gains profits by buying shares at a low price and selling when prices rise. Some shares also provide dividends to the stockholders. Investing for the long term in shares can yield high returns.

4. Buying Bonds

Bonds are mainly purchased by risk-averse investors, who are satisfied with low returns. The Australian government issues bonds that are less risky and provides a consistent income till the date of maturity.

Conclusion

Working 8 hours a day to earn money and not making the right investments make all our efforts wasted. We have to make our money work for us. School teaches that education is important for becoming successful and how to earn money.

But it never teaches how to use the acquired knowledge to practical use. One should save money by investing instead of keeping it aside for future use, it must be invested.

It’s true that money doesn’t grow on trees and it certainly does not increase when tucked away for safekeeping. Hence, investment is the only way to gain profits. However, one needs to gain knowledge before investing.

Having a private broker or banker for making investment decisions is not enough. Investing in real estate involves a lot of aspects. Taking expert advice from professionals like at Quarter Acre, one can easily make the right decision.

Even though schools omitted teaching us about the world of finance, we should strive to overcome it. What better way to start than investing in a property?