Financial Literacy 101-How to Begin the Journey to Financial Freedom

Introduction by Host: Dr. Gee

Hello Thriving Friends! We are beginning a new series this week. Over the next several weeks, we will be talking about financial wellness. We all need to learn creative ways to make wealth, keep wealth, and grow wealth. In this week’s lesson, we will cover the basics of financial literacy.

Point 1: Financial Independence vs. Financial Freedom

We hear these words thrown around a lot when talking about wealth. Financial independence is when you are not dependent on your regular pay or salary. Financial Freedom is calculated. It is how much you need to be Financially Independent.

For more information on this, we have a previous blog on the difference between Financial Independence and Financial Freedom that you can check out here: https://www.thrivewithdrgee.com/blog/financial-wellness-series-week-1-financial-freedom-vs-financial-independence

Point 2: The Richest Man in Babylon

Those of you who have been around for a while have heard about this book. The Richest Man in Babylon by George S. Clason is a wonderful guide to financial wellness. I think everyone should have to read this book. The story does not just show how to make money, but how to make money work for you. Despite being released in the 1920s, it still has fantastic advice in our modern-day world.

Point 3: Advice from The Richest Man in Babylon

1) Pay Yourself First. As soon as you get paid, you should put at least 10% of that paycheck into savings. It is tempting to pay off your bills or get groceries first, but that 10% is important to set aside first. You will make sacrifices to live in that 90% that you may not be able to force yourself to make otherwise. You will find that it is possible to live with that 90% and you will have that 10% for future use.

2) Live Below Your Means. When you begin to make more money, or to have more money in reserve, it is tempting to increase your spending. Avoid this! If you are just going to increase your spending, then you will be in the same place that you were before.

3) Invest Wisely. The book talks about investing in places you have knowledge about. When you are sick, you do not go to your friends. You go to a doctor. When you are investing, talk to people who know what they are talking about. And choose an area you are familiar with, so you are not reliant on others.

4) Manage Risk and Scams. This is another reason to invest wisely. It is easier to manage your risks and know which risks to take when you are personally familiar with your investments.

5) Own Your Own Home. When your home is yours, you have a stable source of wealth to fall back on. A bank will help you pay for your house, but until it is paid off, it cannot work for you.

6) Build Passive Income. If possible, find an investment where your money can build on its own. It is much more effective for your money to be working for you than to let it sit idly in a bank account.

7) Invest In Yourself and Your Skills. Use your wealth to increase your skills. Wealth and money can be lost or taken, but your skills are yours forever. Invest in yourself, and you will have a safety net if something happens to your physical wealth.

Point 4: True Wealth

As we start this new series on Financial Wellness, begin to think about True Wealth. True Wealth is a state of mind. It is feeling at peace with your wealth and having no financial stress. Put yourself in a space to contribute to you community financially. This is what the true purpose of wealth should be.

Closing Thoughts

Financial Wellness is a vital part of our lives. The way that we deal with finances and grow our wealth affects us and those around us, so it is important to be knowledgeable in this area. As we move through this series in the upcoming weeks, let’s continue this conversation and learn from each other in order to thrive in our finances!

By Dr. Gee, Success and Holistic Wellness Advocate