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Did your parents ever give you the advice that to get rich you need to study hard, get good grades so you can get a good job? I know I have heard this advice many times from my parents. But the fact is that getting good grades no longer guarantees that you will get rich. Even many doctors, who tend to be the ones with the best grades, are now struggling to make a lot of money. If you want to get rich, without the need for good grades, then read on.

One thing they don’t teach you in school is that your banker never asks for your report card. If you go to your bank and ask for a loan, whether it’s for a business, a property, or some other investment, then your banker is not going to ask for your report card from school. Your report card from school has very little bearing on whether or not you’ll get rich. There are many highly educated people who are poor and struggling for money. There are also some very uneducated people who are millionaires and billionaires.

Schools are developed to train people to look for work, but this alone will not make you rich. Oftentimes, it’s the educated people with the highest-paying jobs who have the most debt and are in the worst financial straits. You don’t need good grades in school to get rich, but you do need a good financial education. Many people leave school without even the slightest financial education. Many leave deeply in debt from school fees and spend their entire lives trying to get out of debt.

A little bit of very simple financial education can save you a lot of time and trouble and can make you rich a lot quicker. In fact, someone with a lot of financial education, but not much school intelligence, is much more likely to become rich than someone with school intelligence but now financial education.

In school you are smarter if you can make finer distinctions. Let me give you an example. If you can tell a car from a truck, then you have some intelligence. However, if you can tell a 1987 Ford Laser from a 1990 Ford Laser, then that’s a bigger distinction. You can understand things in greater detail and are therefore more intelligent. In school you will also be taught that there is often more than one meaning to a word. For example, the word libra means many different things. It can mean money, in the form of English currency, it can refer to weight, it can refer to a lost dog at home, or it can mean hitting hard. The word has multiple meanings.

In finance, some words have different meanings. Only in finance one meaning will make you poor and another meaning will make you rich. Neither meaning is right or wrong, just different, but they have very different results.

One of the most important words you will ever understand in finance is the term asset. Now your banker will tell you that an asset is anything he owns that has a monetary value. This includes his old golf clubs, his suits, and his car. This is a correct meaning of the word active, but it will make you poor. A better understanding of the word asset is something that earns you an income whether you work or not. Simply put, if he stops working today, an asset will still put money in his pocket. A liability is something that takes money out of your pocket, whether you work or not.

Many people are poor because they spend their time buying assets that are liabilities. They buy things of monetary value that cost them money to own. Owning a car costs money every month. So even though, according to the bank’s definition of an asset, they are acquiring an asset, they are impoverishing themselves. The wealthy focus on spending their time and money to acquire income-generating assets. It is these assets that make them rich, and it is the ability to define the difference between an asset and a liability that makes them financially smart.

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