The school system is designed to keep people poor and mediocre. That’s why they don’t teach you the shit you really need to know about money and prepare you for life in the REAL world…
The school system is designed to keep people poor and mediocre. That’s why they don’t teach you the shit you really need to know about money and prepare you for life in the REAL world…
The system was never designed so that you could become truly comfortable, or even wealthy. And live a life of prosperity… It was designed to raise employees who are obedient and never dream big.
But are simply trained to keep an overwhelming sense of urgency at a young age. To immediately join the labor force and get a job, working for someone else. Regardless if you are passionate about the work or not.
After you finish reading this, you’ll fully understand why they don’t teach you this shit in school. Not us, and you already know, not our children, or theirs either!
And if you want to change that programming, you’d better read this from start to finish because no one is coming to save you.
#1 – Money loses value over time
Money has three important attributes: a medium of exchange, a unit of account, and the most important store of value.
Let’s explain each in one short sentence:
A medium of exchange means that money has to be fluid, and easy to exchange for goods and services.
The unit of account aspect helps people identify how much a thing costs compared to another thing.
But why would people accept trade banknotes for goods and services instead of seashells, for example? Because of the third attribute.
Money must also be a store of value, which means it keeps its worth over time so you can save and spend it later.
And we all know the third attribute is not present anymore. And the cost of that is high inflation.
So, for example, if in 2022 the price you paid for a dozen eggs was $2.86, in 2023 you are actually paying $3.27, a 14% increase.
And if you look at this table, which tracks the price of eggs since 1980, things look even worse:
Egg prices since 1980
Now, some will tell you that the average salary has also increased over time, which is a fair argument, but that does not solve the store of value dilemma.
So if, decades ago, saving money was an option for retirement, now this strategy will only make you poor.
#2 – Saving makes you poor
Money is a tool, not a trophy.
If you’re simply stashing it away in a savings account, you’re treating it like a shiny object to be admired from afar, when really, it should be on the playing field scoring points for your team.
Allow me to explain;
With savings, yes, you are preserving your money and maybe even getting a tiny bit of interest from the bank.
However, it’s not enough to beat inflation, which eats away at the value of your money year after year.
Investing, on the other hand, is how wealth is created in the era of fiat money.
And understanding this will put you ahead of those who still don’t get it. Stocks, bonds, and real estate are the most common forms of investments.
The goal is growth, and the strategy is patience mixed with calculated risk-taking.
The real clincher here is compound interest.
When you invest, your money can earn interest, and then that interest earns interest, and so on.
Over time, this snowballs, leading to exponential growth.
Yes, investing has its risks, but with some financial knowledge and strategy, you can mitigate those risks.
Diversify your investments, hold them for the long term, and understand your risk tolerance.
And if you follow and apply these steps, you might one day have a seat at the table with the big boys.
And the big boys know perfectly well that:
#3 – The central banks control everything
Think of the central banks as a lifeline for the economy, a built-in feature that is there by design.
Whether we are talking about the Federal Reserve or the CEB, understanding how these institutions operate is key to unlocking your ”finance self-awareness”.
They not only print money, but they also manipulate consumer behavior.
Because banks control the money supply, they control your life and how and when you spend your resources.
So because you want to preserve your wealth, you have no choice but to play by their rules.
Central banks manipulate the money supply through a number of tools, the most common of them being open market operations, changing the reserve requirements, and changing the discount rate.
And through these instruments, they nudge banks, businesses, and ultimately us, individuals, to either spend, save, or invest.
Understanding this is powerful because the economic machine depends on the unawareness of the citizens. Which means the free market concept does not exist in our economy.
Read it again, and dwell on this shit for a while, because this is one of the most significant money secrets they don’t teach you in school.
And then let’s move on to the next money secret they don’t teach you in school.
#4 – The difference between credit and cash
So, first and foremost, it is said, cash is king.
This phrase has been imprinted in the minds of many and for good reason. When you possess cash, you maintain ultimate control over your finances.
Cash allows immediate transaction closure, without any future liabilities.
It reflects your liquid assets, or how much you truly own at any given moment. On the flip side, credit is a powerful tool only when wielded wisely.
And most people don’t use it wisely at all, not even the government.
It is trust that allows one party to provide resources to another party, wherein the second party does not reimburse the first party immediately but promises either to repay or return those resources at a later date.
Think of credit as your financial reputation; it showcases your ability to handle debt and can assist in facilitating large purchases, building businesses, and managing unexpected expenses.
However, credit comes with an underlying cost, the interest, and most people have no idea if they can afford to pay it.
And if you want to master the rules of finance like a pro, you know how to play with both.
Credit, like cash, is a tool and if you know how to take advantage of it, there have nothing stopping you from building that generational wealth.
#5 – Money is tied to value
Naval, one of the most successful angel investors in the world, once famously said: ”You will get rich by giving society what it wants but does not yet know how to get. At scale.”
Value creation isn’t a one-time windfall.
It’s a process, a constant cycle of identifying needs, providing solutions, and repeating at scale. And when it comes to distributing this value, the magic lies in making sure it reaches the right places.
And you do that, by building trust, having a great product, and doing good marketing.
The cycle of value creation and distribution fuels not just individual prosperity, but societal growth as well.
In this grand scheme of things, the ones who master the rules are not those who accumulate wealth at the expense of others, but those who enrich themselves by enriching society.
This is all based on the law of supply and demand, which is the key to unlocking 99% of all financial wisdom. Write down this money secret and keep it in sight because they don’t teach you this in school.
#6 – A Monthly Salary Equals Addiction
In his book, The Bed of Procrustes Nassim Taleb said it better than anyone ever could: “The three most harmful addictions are heroin, carbohydrates, and a monthly salary.”
Now you might wonder, “Why did he include a monthly salary alongside substances that have a direct physical impact?
It’s because of the psychological dependency that a fixed income can induce.
It breeds a certain complacency and an aversion to risk-taking that will limit your ability to reach your full potential.
Just as it’s easy to fall into a routine, it’s easy to become addicted to the security of a monthly salary.
Remember, significant wealth rarely comes from routine.
Instead, it often results from taking calculated risks and embracing the uncertainty of entrepreneurship, investments, and innovation.
It requires stepping out of the comfort zone of a regular paycheck and exploring the vast, often volatile, but potentially rewarding realm of financial opportunities.
In the grand scheme of wealth creation, a monthly salary is but one instrument, a starting point but rarely the final destination.
The path to wealth requires you to dare, to innovate, and to venture where others hesitate.
You will never get rich and remain sane at the same time by working for someone else.
In the future, because of the disruptive effects that AI has and will have on the job market, everybody will be an entrepreneur.
So, you’d better prepare accordingly.
#7 – How banks work
If people fully understood how banks work, they would engage in more ethical practices…
But, like with all things they don’t teach you in school, there’s a reason people don’t.
This is precisely why you need to take personal responsibility for your education.
Banks prey on the fact that most people have no idea how to manage their finances and lack a deep understanding of how credit tools work.
#8 – How to keep your money from flying out of your pockets
There’s a quote from the famous movie Fight Club that explains this in one direct but deeply meaningful sentence:
“Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.”
And yes, Tyler Durden is right.
The moment you step out the door of your apartment, everybody is trying to sell you something.
That’s the whole purpose of marketing and advertising. To persuade you to the point where you can’t imagine your life without a certain product.
But what happens after the impulse-buying dopamine wears off? You are left with something you are probably not going to use very often.
There are things that will upgrade your life and things that are nice to have.
That’s why they don’t teach you this money secret in school. Understanding the difference is key to building and preserving your wealth.
#9 – Why money needs to flow through the economy
If fiat money becomes stationary, it’s bad for both the hoarder and the economy.
Money needs to move around in an economy because it enables business activities, consumer purchases, and investment opportunities.
Think about it like this:
When you pay for a service, buy a product, or invest in a business, you’re moving money from your possession to someone else’s.
This movement is vital because it allows businesses to earn revenue, pay their employees, and invest in growth, which in turn helps stimulate the economy.
At the same time, money also needs to leave the economy.
This happens when businesses or individuals invest in foreign markets, buy goods or services from other countries, or pay off foreign debts.
These actions help prevent too much money from accumulating in one place, which can cause economic problems like inflation.
They also help create diverse investment opportunities and strong international trade relationships.
So, it’s important to understand this because if you have cash flow, you can continue to reinvest your profits and multiply the revenue of your business, for example.
And this also applies to investing. If you want to make money, you must first be prepared to let go and multiply in the economy.
#10 – How to budget
Budgeting isn’t just some dull number-crunching exercise.
It’s the best practice for achieving financial freedom.
It’s about making your hard-earned money work for you, not the other way around.
It’s about being the boss of your money, if you will, planning your future expenses, and turning your dreams into reality.
With good budgeting skills, you’re actively working towards your financial goals.
The fact that schools overlook this vital skill is a bit like forgetting the secret sauce in a recipe.
It leaves you unequipped in a world that’s all about money management.
Here’s why they don’t teach you this money secret in school: when you learn how to budget, you actually own the keys to your financial kingdom.
Imagine a world where everyone is in control of their finances and personal debt is the exception, not the norm.
Most people are stressed because of their finances, so fixing this issue would definitely make the world a happier and less stressful place.
#11 – How to negotiate deals
Negotiation requires confidence, but know this: life itself is a great negotiation game, and if you don’t get good at it, you are going to have a big handicap.
In everyday situations like buying a car, getting a new job, or even signing a lease, negotiation can make a big difference.
The idea of negotiation can seem daunting. Many people are used to accepting the first offer they see.
But it’s crucial to remember that prices and salaries aren’t always set in stone.
The first offer is often just a starting point for discussions.
When you negotiate, you have the potential to save significant amounts of money. You can negotiate a higher salary, a lower price for a car, or even a better interest rate on a loan.
These savings can add up over time, putting more money in your pocket.
But it’s not just about saving money.
Negotiation is also about understanding the value of things and asserting your own worth.
So why is negotiation such an important money rule? It’s simple.
Negotiating gives you more control over your financial situation. It allows you to push for better deals and ensure you’re getting the most out of your money.
It’s a key skill that can help you navigate the financial aspects of life more effectively.
So, the next time you’re given a financial offer, remember that it’s not necessarily the final offer.
Don’t be afraid to negotiate. It’s a practical skill that can have a big impact on your financial health.
Remember that you are not paid what you are worth, you are paid what you ask for!
#12 – Tax Avoidance vs Tax Evasion
You’ve probably heard the terms “tax avoidance” and “tax evasion” thrown around.
They might sound similar, but they’re as different as night and day, and confusing the two could land you in a whole heap of trouble.
Tax avoidance is all about using legal means, like deductions, credits, or exemptions, to reduce your tax bill.
It’s totally above board and smart financial practice.
You’re basically playing the game by the rules, but you’re playing to win.
On the flip side, tax evasion is like trying to sneak out of a restaurant without paying the bill.
It involves illegal practices, such as not reporting income, or reporting expenses that didn’t occur.
This isn’t just frowned upon; it’s flat-out illegal and can lead to penalties, fines, or even jail time.
So, in a nutshell, understanding the difference between tax avoidance and tax evasion is like knowing the difference between driving within the speed limit and flooring it on a busy street.
It’s just too bad they don’t teach this shit in school.
#13 – How the money supply expands and contracts
Here’s the simplest way to explain this: When the money supply expands, there’s more cash flowing around.
Banks have more to lend, businesses can invest more, and generally, people spend more.
However, under certain situations like pandemics, supply chain issues, and wars, for example, this growth becomes fragile.
If there’s too much money chasing too few goods, you get, you guessed it: inflation.
That’s when prices start climbing, and your hard-earned money doesn’t stretch as far as it used to.
On the flip side, if the money supply contracts, things can get a bit tough. Banks tighten their belts, businesses might cut back, and people often rein in their spending.
It can slow down the economy, and if it’s too severe, you could end up in a recession.
So, why should you care about all this? Well, because right now we are in the middle of a money supply contraction and, some may say, a recession.
And understanding how the money supply changes can help you make smarter financial decisions. That’s why they don’t teach you these money secrets in school.
If the money supply is expanding and inflation is on the rise, maybe it’s time to think about investments that can keep pace with inflation.
If the money supply is tightening, it might be a good time to stash some extra cash away for a rainy day.
It’s all about staying one step ahead, and understanding the money supply gives you valuable insight into the economy’s rhythm.
#14 – How to fight inflation
You know those times when you walk into your favorite grocery store, and it feels like prices have skyrocketed overnight?
That’s inflation sneaking up on you, and it can feel like you’ve walked into a surprise boxing match with your budget.
Now, imagine that scenario, but on a much larger scale, impacting not just your grocery bill, but your rent, your utilities, your car payments, basically everything.
That’s high inflation, and it hits hard. Everyone has felt it over the last few years.
Make sure to check out our recession videos to learn more about that!
#15 – Work hard
School creates factory workers and good employees.
When they ask you what you want to be when you grow up, they expect you to respond with a job title. Say “lawyer or doctor,” and you get a round of applause. Say “Youtuber” “Freelancer” or “Professional Gamer,” and they’ll laugh at you.
And this creates the mentality that the only way to make money is for someone to employ you and for you to be a good little worker bee.
It promotes staying in your lane and never walking the unbeaten path.
These are all just some of the shit about money they don’t teach you in school.