Conditioned to fail financially

3 Reasons Why You’re Conditioned to Fail Financially

Money is important, so why isn’t it a bigger focus in American education?

The look of failure

You don’t have to look like this at school.

If you came through the public school system in America, you’ve probably asked yourself: why am I learning about this? Shouldn’t I learn something more useful? 

If you’re like me, you end up crying in the shower most mornings and driving to school in a frustrated confusion.

I thought I was a pretty sharp guy in high school, but I knew virtually nothing about money management and wealth building. I ended up getting very serious about money after I found myself in $165k in debt after college.

It’s funny how that works.

How did I overlook something so important so badly? I felt responsible for my actions but also felt that my education had let me down.

In my mind, we should make sure that students fully understand the consequences of their financial decisions. I had no finance courses available to me in high school and I learned my lesson hard way.

I was not conditioned to build wealth – I was conditioned to fail financially.

Ideas spread quickly, and money is just like everything else – the more you talk and think about it, the more you learn. As you gain knowledge, you’re better equipped to use it for your benefit.

Wealthy people understand this and they pass lessons of wealth to their children. If schools don’t teach these lessons, how will the lower and middle classes ever learn?

Through Home at 30, I want to make sure that everyone has the information necessary to capitalize on the vast opportunities before them. People should understand that financial freedom is possible and you can create more wealth than you realize.

No one should sign their life away to a mountain of debt they don’t understand like I did. America is financially illiterate because schools teach us to fail financially. Here are three reasons why:

1. You’re Programmed to Consume, Not Maximize Wealth

America has fallen victim to consumerism.

Consumerism is that voice inside your head that makes you want to buy new clothes even though you just went shopping last weekend. It’s browsing Amazon when you have no particular goal in mind. It’s the reason why you see advertisements to buy something everywhere you turn. Consumerism is the single biggest detriment to your financial independence.

As a society, we’ve glorified material things to the point where people judge the happiness and success of others based on the size of their house. This mindset is important to large corporations because it keeps their pockets lined with cash. They pay you to work 9-5, only for you to go home and give most of your paycheck back (if not more) by buying their products.

“Through Home at 30, I want to make sure that everyone has the information necessary to capitalize on the vast opportunities before them. People should understand that financial freedom is possible and you can create more wealth than you realize.”

If our educational system prioritized wealth creation and money management from a young age, how would that change the hierarchy of wealth? I’m willing to bet that people would make different financial decisions if they realized how they’ve been conditioned to maximize somebody else’s wealth instead of maximizing their own.

2. We Don’t Talk About Money

we need to talk about money

To learn about money, we must talk about it.

My parents didn’t talk about money very much as I was growing up and they still avoid the topic for the most part.

What I’ve come to notice throughout my life is that’s pretty common amongst lower and middle class people. In fact, many of them have negative views towards great wealth and it’s seen as a bad thing to discuss money or put too much emphasis on it.

At the same time, most people would love to be wealthy. If money is such a bad thing, why does everybody seem to want more of it? I haven’t heard of anyone who asked their boss for less money.

For the lower and middle classes to enjoy more wealth, they first need to welcome it mentally.

I spent more time around richer people in college and noticed how freely and openly they discussed topics of wealth. It became clear to me that making money has less to do with intelligence than simply knowing the rules and tricks of “the game”.

How would you ever learn the rules and tricks if you never discuss them? Talking about money is one of the best ways to bounce ideas off others and share wealth-building insights.

We need to bring money back into the conversation.

3. You’re Not Taught How Money Works

A major contributing factor for those who don’t have money is not understanding how money works. Below are three of the biggest mistakes and misconceptions embedded in our brains:

Trading Time for Money

From the day we start first grade we’re taught to trade our time for money. “Get into a great college and work your way up the ladder” we hear. Supposedly, if we earn a high enough salary one day, we’ll become rich somehow. That’s nonsense.

“I’m willing to bet that people would make different decisions if they realized how they’ve been conditioned to maximize somebody else’s wealth instead of maximizing their own.”

First of all, your salary is only one half of the equation. If your expenses increase proportionately with your income, you’ll never become any wealthier. Also, if you don’t spend your money on things that hold value, increase in value, or generate a return, you might as well throw your money out the window.

These are things that the wealthy know and the less fortunate do not, and it keeps the money flowing from your checking account right back to the pockets of the wealthy.

To build wealth, your money has to work for you.

Dismissing Interest

Interest can be a beautiful thing.

When you invest in bonds, put money in the bank, or lend money to a peer, you get interest in return. Interest is the benefit you get for putting your money to work for you by letting someone else use it; this is an excellent way to increase your net worth.

On the flip side of that, credit cards and student loans also require interest. If you’re not careful, large balances can cripple your household very quickly because those interest rates require larger payments as the balances grow.

“If you don’t spend your money on things that hold value, increase in value, or generate a return, you might as well throw your money out the window.”

The reality of the situation now is that the lack of education for personal finance leaves people in the dark about the benefits and the pitfalls of interest. While we’re encouraged to spend more on our credit cards (more points!) and take out loans for college (because you have to go to college), it’s no one’s responsibility to help you get a return on your money while not letting your liabilities skyrocket out of control.

Unfortunately for many people, they simply don’t know what they don’t know.

Buying a Home Is an Investment

I’m a firm believer in Robert Kiyosaki’s Rich Dad Poor Dad philosophy that if it takes money out of your pocket, it’s a liability.

People have blindly believe for decades that housing prices will go up forever and that buying a house is the best investment you’ll ever make. I’m here to tell you that if you live in your house, it’s a liability.

People take great pride in their homes.

People take great pride in their homes.

I know you can build equity in your home and generate a return on it if you sell it. I also know that taxes, maintenance and insurance drain your bank account at a steady rate while you own a home. When you take the mortgage into account, you have a gigantic financial burden that hinders your ability to invest that money in a more lucrative way.

Not to mention, owning a home also makes you less mobile, hurting your chances of increasing your income if you have to move for a new job. This could have significant long-term consequences for young people especially.

“It became clear to me that making money has less to do with intelligence than simply knowing the rules and tricks of ‘the game'”

The best way to use a home as an investment is to buy rental properties. This requires buying homes and renting them out to others, using the rental income to pay off the mortgage while you build an investment portfolio of homes that generate free cash flow every month. Was that taught to you in school?

You Don’t Have to Fail Financially and You Can Help Others

The financial literacy problem won’t go away overnight.

Take your first step toward financial success by downloading my FREE wealth building tool.

We need to combat our bad habits and lack of education by spreading awareness about the various ways to maintain and build wealth. Home at 30 is on board – are you? Sign up below and pick your favorite topics to get insights and updates in your inbox!

Are you a soon-to-be college student/graduate? Be sure to check out:

How to Boost Your Salary Potential in College
Advice for College Graduates: Ten Tips for Success

Getting money is like a game and the rules of the game are complicated. Shouldn’t everybody understand the rules? Let’s help change education for the better! Share your thoughts in the comments!

Disclaimer:
All opinions expressed on this blog are solely those of Home at 30 and are in no way affiliated with any other organization or institution. The purpose of this blog is to give general education and information about investing, wealth, careers, and college; It is not intended to be professional advice.

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Author: Josh

After earning an undergraduate degree in Economics and a Master of Arts in Management at Wake Forest University, Josh has paid off over $80k in student loan debt in 3 years. Josh wants to help people make smarter decisions by sharing the lessons he’s learned about brand/career building, making the most of college, and pursuing financial independence.

3 Reasons Why You’re Conditioned to Fail Financially was last modified: September 21st, 2017 by Josh
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