6 Concepts That you Must Understand About Financial Education

Without exception, all of us have a relationship with the law of economics, but not everyone is familiar with some terms about financial education that allow us to have a great advantage and make the relationship we have with it more satisfying and allow us to enjoy a free life.

Therefore, we will show you the 6 fundamental terms that you must manage in a simple way.

1. Financial education:

This is to have the necessary skills to recognize what to invest and above all, why not to invest the money.

This is to be able to establish the benefits and disadvantages of any opportunity presented to you before making decisions.

In summary, it is to have the necessary knowledge to know how to take advantage of the money that reaches your hands to the fullest.

2. Financial freedom:

This is to be able to have the time and dedicate your efforts into what you really like, without the need to worry about generating income since a system is getting it for you. It can also come from the good investments you have made.

3. Active:

It’s what makes money come into your pocket.

Examples? There are many, but to name only  a few; the properties that you have for rent, the royalties for the sale of a book or a song, the dividends of the shares, etc.

4. Passive:

It’s what makes money come out of your pocket. As an example, we have the house. Why? Simple … because you must say goodbye to part of the money to pay for public services, taxes, repairs and credits to the bank (if you have them). Another clear example is your car, because regardless of the model or brand, you must spend money for its optimal performance. For example, fuel, mechanical checks, spare parts, accessories, taxes, etc.

We do not mean that you should not have a house or car, what we suggest is that you have an effective financial education so that this type of debt does not strangle you financially.

5. Active income:

It is the type of income where your physical presence is required to get money. The most common example is employment, because if you do not go to work, you do not get income.

Another way to obtain active income is to work as self-employed, which refers to people who have a business establishment, run a street business, or own medical offices or lawyers. The situation is the same in all cases, if you do not attend your business, there will be no income.

6. Passive income:

It is the income that can be generated without needing your physical presence.

It is the fruit of an effort made over a period of time, which subsequently allows us to receive monetary compensation without our time or effort being necessary.

There are many options to generate this type of income. As a chef, for example, you can create a course with several videos, explaining in a clear, detailed and original way how to prepare exclusive dishes. Then, you can upload it to the internet, promote it online and charge a fee so that people who are interested in learning to cook can obtain this training. In this way, no matter where you are, you can receive income without having to be present for each of your students.

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Another case of passive income can be seen in a multi-level business, in which everyone can leverage their marketing network to obtain income from sales and affiliations made by each member of their team. Another trend that is growing a lot is the Youtubers, who earn revenue from Google thanks to the reproduction of their videos.

We hope these concepts of financial education have inspired you and motivated you to start thinking about how to be free financially.

And what does this require? Get assets that generate passive income, that’s the key!

To contact Norma and Jerson you can call them on WhatsApp at +573133918817