Formal education will make you a living; self-education will make you a fortune. There are certain key things in life that aren't taught in schools e.g. money, taxes, credit, etc. If it were up to me, I would set a mandate that ensures every school in the nation incorporates “money management” & “financial education” in their curriculums. Being an individual who went through the educational system, who went to university and graduated, not once was I taught how money worked, how taxes worked and the importance of credit. I strongly believe that these are lifelong know-how skills you must learn in order to survive and thrive in our ever-changing dynamic economy in the millennial era.
The 1% who amass all the wealth on this planet understand exactly how money works and how to make money work for them. Most people are brought up with having a ‘saving' mentality. The problem with a ‘saving/budget' mentality is that you are being defensive. The best form of defense is offense. Shifting from saving to income-producing means that instead of being defensive, you are now on the attack. For as long as you are saving your money, you aren’t earning from that money. Money is worthless if it is not used. Whatever you don’t use, you lose. Now, that does not mean you should be frivolous with your money, it just means you should utilize it in smarter ways to produce more money which then results in cash flow. There is no shortage of money on this planet. If you don’t have the money equivalent to your work ethic, it’s because you have the wrong information and/or have been misinformed. The correct information is the starting point.
Saving money is a scam perpetrated by banks. Money goes down in value, as a result of inflation. Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. If you were to put £1,000 in a box for 50 years, the money will still remain there 50 years later. However, the difference now is that you can do a lot less with it. This then means that cash is dead as it depreciates in value, the longer you hold onto it.
The average high street bank offers on average an interest rate of 0.94% for an instant access cash ISA and 1.35% for a 1-year fixed rate cash ISA. Meanwhile, the banks take your money and put it to work where it will multiply 5 or 6 times over. Hence why banks demand they are given 3-5 working days when you issue a withdrawal request – the reason being is they haven't got the money to hand! Banks do not keep your money sitting in the bank, as they know they will earn next to no money doing this. The bank is a business, therefore, they must make significant profits for the business model to make financial sense.
In summary, putting money in the bank is worthless to you but valuable to the bank. Ultimately, for money to be useful, it must be put to use in a system to allow the money to work for you. The goal is for your passive income to exceed your active income.