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The most common cause of poverty is financial illiteracy and low financial intelligence. A person with a low financial IQ simply does not know how to manage money and does not have the skills to handle them correctly.

The fact is that neither schools, nor universities, do not teach financial literacy. Even in economic faculties there is no such thing as to teach how to manage money. Therefore, everyone should study the science of money independently. But not everyone has enough time and desire for this. In words, all want to be rich and successful. But in reality, to study the science of money in good faith, only a few give themselves work.

Meanwhile, until you understand the laws by which money is distributed in the economy and you do not learn how to manage your money, you will be poor, no matter how much you earn. Surprisingly, even if you start earning a million dollars a month, you will still be poor if you do not learn how to keep what you earn and multiply. Why? Because it all depends not on how much you earn, but on how much you spend! You can earn a million dollars a month, and spend – more than a million, climbing into debt and loans!

Of course, the first thing you need to learn is to earn good money! But this is only the first stage of financial literacy, on which, unfortunately, many people stop and continue to be poor!

However, there is a second stage of financial literacy – the ability to save money and save money, forming capital from them. Anyone who goes to this stage, ceases to be poor. But it does not become rich either, because money is constantly depreciating!

For those who want to grow rich, there is a third stage of financial literacy – the ability to invest time and money in profitable projects and constantly increase capital!

The mechanism of enrichment is very simple: in order to constantly grow rich and live on passive income, you need to postpone a certain amount of money from each earnings and form capital from it; and at the same time, invest part of the money in what will eventually bring even more money (the so-called “assets”) and multiply your capital.

Anyone who understands this mechanism can get out of poverty and begin to grow rich. Even with one dollar you can start to form your capital. But one who does not understand the mechanism of enrichment, can never get rich, no matter how much he earns. Therefore, learn to understand this mechanism. Understand its essence. Understand the basic financial concepts to better understand what is happening to the economy.

The backbone of financial literacy is only 8 key concepts:

– income and expenses

– assets and liabilities

– time and money

– capital and investments

Of course, each concept includes a number of key terms that every financially literate person should know and understand. The most important financial terms are presented below, on the mental map:

If you develop your financial intelligence and increase financial literacy yourself, find and carefully study at least one book for each term. Without a deep understanding of these key terms, it is impossible to start to grow rich consciously!

First, look at how income and expenses are formed. Learn how to increase your income and take control of your expenses. Then sort out what relates to the assets, and what concerns the liabilities. Learn to distinguish them from each other, acquire any assets and get rid of excess liabilities. After that, sort out the nature of time and money. Learn to manage your time and generate cash flow. And at the last stage of your independent financial training, understand how to create capital and what to invest in it. Learn to set clear financial goals, increase capital and invest it in certain profitable assets, getting a good net profit, which is not taxed or subject to minimum taxes!

Continually develop your financial intelligence, increasing your financial literacy and using the knowledge you have gained in practice. Remember that only a financially literate person can become a truly rich person and not lose at the same time such important values as health, freedom, trust and happiness! Honor your financial IQ and you will achieve in this life everything you want!

Step-by-step scheme for eliminating the first cause of poverty

1. Find any sane financial literacy course and study it carefully; move from simple to complex and study the following topics consistently:

• Formation of income and expenses

• distinction of assets and liabilities

• the nature of time and money

• capital formation and investment

2. Find recommendations and carefully study the 10 best books on the nature of money (and if possible, make brief notes of these books to occasionally return to them and remind yourself of the most important things);

3. Find a mentor and constantly improve your key professional skills to start earning well;

4. Start to spend less than you earn and regularly, with every earnings, save some money for the formation of your future capital (even for a start it will be a ridiculous amount, for example 100 dollars a month, over time, thanks to investments and compound interest, you easily multiply this money and get the amount with six or seven zeros);

5. Start investing time and money in potentially profitable projects and multiply your capital.