Can Professional Financial Education Help you manage your Personal Finances?
To achieve anything in our lives – including financial freedom, wealth, and success in general – there are two core necessities: intent and knowledge. Intent is the force within us that lunges us into action; it’s the push we get from within us or sometimes driven by external elements that inspire us or motivate us.
If intent is the vehicle, knowledge is the fuel. Without knowledge, your intent stays void. Without intent, your knowledge stays with you but won’t do much else.
Intent + knowledge = success.
Sir Alfred Davidson once said,
“Taking responsibility for the future means knowing enough about money to make the right decisions”
Applying that to personal finances, how does this play out? Can you really manage your personal finances better when you receive professional financial education? Is education really the key to make better investments and manage expenses better?
Let’s explore:
It should have started while you were at school
According a study by Capital One, only 45% of graduating high school seniors in the U.S. revealed that they are not ready to manage their money.
JumpStart reports that Only 4 states in the U.S require students to take a semester with courses lined up on personal finance. The situation doesn’t get any better once students grow up and get into colleges. Sallie Mae reports that 50% of college students have more than 4 credit cards with the average credit card debt piling up to a whopping $4,000.
Only 17% of these college students pay their cards off, if ever. Scott Gamm of Huffington Post drives the point home with a plea to make personal finance education compulsory by pointing to the many economic challenges we find ourselves in.
The onus of responsibility is yours
Starting from making money, managing your finances, knowing all about investment vehicles, arbitrage opportunities, and the burden of making sound financial decisions– it all rests on your shoulders, according to BB & T.
Your knowledge base will have to span starting from Innumerable card options, several types of mortgages, a global window of opportunity for your financial investment venues, and going all the way deep into the nitty-gritty of every financial instrument you consider. Depending on where you reside and what you do for a living, you’ll have to extend your knowledge into other streams such as taxes, accounting, bookkeeping, risk management, and a whole lot more.
Financial education is your business. Sometimes you’ll get lucky if you have an institution such as a pro-active government or a forward thinking educational firm that sits on the responsibility of imparting financial knowledge. Absorbing this knowledge, applying it, and benefiting from it are things that only you have control on.
Go for continuous education. Grab professional certification if you must. Spend your life trying to master the art of personal finances. You won’t lose anything. In fact, you might get more than you bargained for.
Financial Education gives you power
According to a policy group publication by OECD, financial education isn’t just for investors; it’s also crucial for an average person looking to balance her budget; for an average family looking to buy a home, to fund children’s’ education, and to retire. Lack of financial education gives others who do possess such knowledge an “Unfair Advantage”, according to Robert T. Kiyosaki in his book Unfair Advantage: The Power of Financial Education. The governments understand this; savvy investors live by it.
This power helps you to gain from it. It disallows the Wall Street to make the rules. Since at least 35% of middle class Americans revealed that they or someone they know experienced a physical symptom of stress due to the state of economy (we can safely conclude that the situation is the same elsewhere in the world), it might even help you to distress and live healthy
Financial Literacy gives you control
It’s easy to blame the economy, depress yourself out of the system, ruin your finance, make bad investment decisions, and wring out the misery of debt from within you. It’s hard to stay informed, learn and adapt, gain professional expertise (even if you aren’t a finance professional), and think smart to factor in aspects such as inflation, economic risks, and many other financial risks. Success personal finance management with investments that reflect your current financial health gives you tremendous control over your life.
The word “loss” is the wrong place to end up after all that you gained through years of hard work.
Certification is just the beginning
Financial markets now have increased granularity and complexity. As a result, you’ll see new roles, designations, licenses, and certifications flooding the market place giving rise to new age financial professionals. Certifications such as Certified Financial Planner (CFP), Certified Public Accountant (CPA) and Certified Financial Analyst (CFA) have always been popular.
For institutional services, other favorable certifications exist such as Financial Risk Manager (FRM) and Chartered Alternative Investment Analyst (CAIA).
Apart from these, there are choices of areas in financial management that you could learn and develop expertise in such as forex markets, derivatives, stocks and securities, and Investment Banking, Bullion.
As for most things related to knowledge and mastery, a piece of paper won’t make you an expert on finance. Deep, authoritative, and unquestionable knowledge with years of trial and error does. A passion towards learning guts to go wrong and bounce back, and an ability to think beyond what’s apparent are all skills that’ll take you a long way with regards to your financial education.
While most of these certifications are professionals looking to create a career in finance, the knowledge and experience gained is crucial.
Whether you are an earnest investor, finance professional, a working finance executive, a business owner, or even a student, work to expand your skills and gain mastery in financial education. It’s a mandate not a choice; at least not if it’s your (or someone else’s hard-earned money).
What do you think?
