Financial literacy is not about getting rich quick, hoarding money, or following the latest trend.
My definition of financial literacy is the understanding of the 5 COREs Principles: Banking, credit, debt, investment, and insurance. It’s the knowledge to apply and leverage these 5 CORE pillars within your personal finances to create generational wealth.
It’s having the basic education and understanding of how money works. This involves the concept, principles, myths, and best practices.
Different areas of financial literacy can include:
- Managing your personal finances
- Managing your retirement accounts
- Managing debt
- Credit cards,
- and mortgages.
My core belief is that the KEY difference between the 1% of wealth and the 99% IS financial literacy and knowing HOW to leverage that knowledge for themselves. You know that saying, with knowledge comes power? Having financial literacy IS power because you gain an understanding of the system the world uses and thus being able to find loopholes to what works best for yourself.
It’s a way of thinking.
The term “mindset” is sometimes overused but the concept is undervalued.
So why is this important? It gives power back to the people. The wealthy 1% not only knows this information, but has also been leveraging this for years.
What are the benefits of financial literacy?
Many of us have mortgages, car loans, credit cards, debt, and most of us have more than one of those! The question then becomes – what areas in our life do NOT require financial literacy? This can shine a light on how leveling up our financial literacy can literally level up our life.
Financial literacy helps us manage:
- Credit cards
- Student loans
- Earned income
Part of financial literacy is learning about the different types of income and how they can help you build wealth, invest, and retire. There are 7 different types of income – your job is considered earned income, which is taxed the most. Other forms of income help you pay less taxes and work as a shelter for you to protect your assets and money. In fact, I created a webinar on the 7 different types of income that you can access here.
What stops us from creating wealth?
While we know the importance of financial literacy, the biggest reason people don’t strive to improve this area of their life is that they get triggered when the topic of money and finances come up. Often, it’s because money is associated with getting rich when, in fact, it has NOTHING to do with getting rich. That’s simply what society has taught us to believe it is.
If you do get triggered by the topic of money, I highly recommend taking the time to understand your own relationship with money and WHY those triggers come up. Financial literacy is a form of self love. In a holistic sense, your mental, physical, emotional, and spiritual health matters. But so does your financial health, so don’t neglect it. You deserve to nurture ALL areas of your life as you grow.
At SVC we focus on teaching the 5 COREs Principle, the foundational pillars that you need to build generational wealth. Wealth doesn’t just happen overnight – it requires a foundation because you need something to build off of.
Being educated means you are empowered to make the right financial choice for yourself. Most financial advisors at banks are low key sales reps because the products they recommend to you are a product that the banks sell. Therefore it’s more of a service to meeting their quota then it is in YOUR best interest.
In today’s world, you’ve got so many choices and having financial literacy allows you to understand the fine prints and discover what are actual benefits and what’s just a sales pitch banks/credit card companies use to reel you in.
What are 5 main components of financial literacy?
The 5 main components of financial literacy, what we call the 5 COREs Principle, include banking, debt, credit, investment, and insurance:
- Banking: How to use your money day to day
- Debt: How to tackle debt without getting overwhelmed
- Credit: How to leverage loans and credit cards to make more money
- Investments: How to make money with your money
- Insurance: How to protect your money and assets
If you’ve been following me, you know that I’m an advocate of the holistic approach for almost everything in my life. The 5 COREs to me encompasses ALL areas of your life and they are the fundamental pillars for laying your foundation to wealth.
Having the basic knowledge in each of these 5 areas will set you up for success and help you get what you want out of life from the financial perspective.
If you don’t already have it, grab a free copy of our 5 COREs Principle ebook to learn more.
How do we use financial literacy in everyday life?
Some of us dream about retirement, but not many people know the exact number that they need to retire. And for those who do know how much money they need to live off of, have no no idea how to plan for it. We’re taught to work and save money so that one day down the road we can retire. But what they don’t share is the second half of that statement.
The way to retire early is to learn how to make your money work FOR you. Meaning, put your money to work so your money can start earning money for you. Stay with me now – I know this isn’t how we normally think. Whether you’re working a job or running a business, you’re still WORKING for your money. True freedom of time comes from being able to step away from doing ANY work and still make money.
And the same principles apply whether you’re making minimum wage or run a 7-figure business, because at the core of it all is financial literacy. The fact of the matter is, you’re already using it every day. What you’re lacking is the knowledge to GET AHEAD. What you’re missing is leverage. And that’s what I teach.
Financial literacy can start as simple as:
- Where you choose to save your money (basic bank accounts, high interest savings accounts, TFSA, RRSP, ROTH or ROTH IRA)
- How you earn your money
- How you split your paycheck
- How you chose to budget,
- Or how to protect your assets.
Most people won’t think about protection until they’ve earned a certain amount, but that’s honestly silly because there are methods to leverage your money by protecting it!
It’s these tiny nuances that make the game fun. I know it can seem overwhelming at first, but once you learn these basic principles, you’ll learn to enjoy the game and to play the game well. I can’t stress this enough – it’s all about leverage!
Our practice is NOT rigid, but rather, our methods are designed to move the needle for you WHEREVER you are in your financial journey.
Wealth isn’t built over a single day, but it pays dividends to start NOW.
Topics: Insights, Financial Literacy