It is a must to get the financial education and have the knowledge on-tap, ready in your head BUT if we don’t add action, we ain’t going nowhere.
Sometimes it is good right where we are and we don’t want to move or change direction. That’s great and that’s our choice.
Often we want to make a change but we just never do.
I think it is fear. And excuses (because of the fear).
I have spent many hours in negotiation with my own fear and in some areas it is still the boss but I am slowly becoming the boss in the financial department.
At age fifty-two (and five years into my own financial education), I am confident to have a discussion with an experienced property investor about his portfolio – heeha! I understand things like LTV (loan-to-value) and ROI (return on investment). These terms weren’t part of my internal vocabulary three years ago, let alone my newly-found, confident external vocabulary.
The financial lesson for my son five years ago ‘wouldn’t have existed’.
The financial lesson for my son three years ago would have been “…um …ah …go and ask your dad”
The financial lesson for my son today is :
Make sure he hears words and terms like : ‘owner-occupied’ ‘investment property’ ‘lending’ ‘asset’ ‘mortgage’ ‘LTV’ ‘interest’ ‘ ROI’.
Over time make sure he understands what these words/terms mean.
Show him real life examples of these terms and how they work.
The financial lesson for my son in the near future.
Maybe purchase my first investment property. (or maybe not – I don’t know yet?)
The financial gain for my son when he is an adult.
His knowledge will allow him to ask the right questions, crunch the right numbers, consider the right factors, know who to trust and know where and how to find the information he needs to make an informed financial decision. He could choose to invest in property or in a start-up or maybe the stock market?
Either way his financial education will enable him to make informed decisions and steer him towards his financial freedom.
Financial lesson for mom today, tomorrow and in the future :
Don’t stop learning and don’t stop teaching my son.
To Summarise :
Financial Education (reading, studying, learning, seminars, workshops, courses)
Action (teaching my son, talking to a property investor, looking at my own situation, making small financial changes)
The Right Direction.
For more details on ROI and LTV see explanations taken from INVESTOPEDIA http://www.investopedia.com
The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The term is commonly used by banks and building societies to represent the ratio of the first mortgage line as a percentage of the total appraised value of real property. http://www.investopedia.com/terms/l/loantovalue.asp
ROI (RETURN ON INVESTMENT) A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ROI measures the amount of return on an investment relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio. http://www.investopedia.com/terms/r/returnoninvestment.asp