Do You Know Where and How Debt Started?

Debt has been around for hundreds of years, probably as long
 as there has been money. Debt has been a burden to many since
 then. In early Greece debt was physically tied to bondage, for
 if one was unable to repay their debts they simply became
 property of the lender. In his wisdom Solomon, the great
lawgiver, passed a law in 594 B.C. that outlawed debt
bondage and canceled all outstanding debts. That was of
course good news for those who owed money but not so for
 those who had lent it.


It was in the Italian banking system in the 1300's that
 modern lending got its start. Using a bill of exchange
a bank could lend money, designate from among dozens of
 currencies and transport it safely over poorly guarded
highways. Even if it was stolen it could not be cashed by the robber.
Thus 100 gold coins in a bank in Venice could be used in Florence.
 The bill of exchange was then able to be used as currency among
merchants and lenders, further increasing the value of the initial
gold coins. This type of lending was only available to the merchants
and the nobles, so ordinary workers were kept from the benefits and
 burdens of debt.

Debt in America - The Twentieth Century
Lending continued to be reserved for the upper class until fairly
 recently. Most middle-class and working-class people had no debt
 because the banks refused to lend them money. Most rented their
homes and even if they did own a home it was paid for as it was
 being built. A middle class person in need of a loan only had
 the options of a pawn shop or a loan shark. The New York State
 Attorney General, in an attempt to curb loan sharking, put great
 pressure upon banks to make consumer loans available.

  In 1928 the National City Bank of New York offered loans with an
 interest rate of 12 percent to its working class customers.
On the first day the bank received five hundred applications.
 Because of the interest rate and a low rate of default, the loans
 became a source of great profits for the bank.

This should give you an idea of how it all started and maybe some
idea of how it might end.

The Bible says, "Neither Lender Nor Borrower Be"

We got ourselves into this mess and maybe we need to acknowledge that
and get ourselves out of it.

Your comments are welcome but kill the Messenger!

Who Do You Listen To? Who Should Teach Financial Literacy? Schools?

Maryland is requiring their students to take financial literacy classes starting in September 2011. Will that really work? http://www.marylandreporter.com/page5502530.aspx read the article yourself and compare it to what Robert Kiyosaki says http://www.richerdaddy.com/10-principles-of-teaching-children-about-money/
Which is the better model?

The reason I ask this question is because more than likely the model they will use will be based on the old model of what doesn't work and we need something new that will stick and last generations.
Based on the present model of our school system, I'm personally not so sure that financial literacy is a subject that schools should be teaching. That's just my opinion.

I believe that financial literacy should be looked at from the perspective of who is making the money and how are they making the money? I'm not talking about greedy Wall Street, I'm talking about mom and pop stores, retail stores, toy stores, or even individuals like Trump, Robert Kiyosaki or your neighborhood business people who you can learn from. If they can do it maybe they will interested in teaching others what they know except no one ever asked them. Maybe it's time to ask.

Pay Yourself First

This is perhaps the best and most simple benefit to becoming financially literate. You get into the habit of paying yourself first. This is definitely a good thing and something most of us are not used to. BEFORE you pay one bill I don't care what it is - mortgage/rent, cell phone, cable, etc - You Pay YOURSELF First! Make it a habit to put aside a certain amount - no matter how big or small from $.50 cents to $1,000 and PAY Yourself - You, Inc. This is such an empowering move for you.

How to Become Financially Literate

Becoming financially literate means what to you? If you ask the average person, being financially literate means that you KNOW about money. Let's break that down. What do you know about money? We're taught in school that money is about paying your bills, balancing your checkbook and saving only if and when you have some money left over.

Whatever that means to you, you still have to start somewhere. Remember the old saying, "You have to crawl before you walk" - well, you can begin by getting the best book written on financial literacy - Rich Dad, Poor Dad. Say whatever you want good or bad about Robert Kiyosaki, he has written a book simple enough for a nine year old to understand so this would be the best place to start your financial education. The book is written in plain, simple and easy to understand language - just what anyone can used to get started.

The Price of Being Financially Illiterate

This mother and daughter did everything they way they thought they should. The daughter has her degree but is now in over $90k of debt that she may not be able to pay off anytime soon and until she does this will stop her from building wealth because she is paying off debt. This unfortunately is the price of financial illteracy
http://finance.yahoo.com/college-education/article/109701/placing-the-blame-as-students-are-buried-in-debt?mod=edu-collegehttp://finance.yahoo.com/college-education/article/109701/placing-the-blame-as-students-are-buried-in-debt?mod=edu-collegeprepprep

I'd like to share with you a quick video from a brilliant businessman, Russell Brunson. http://university.dotcomsecrets.com/

I think this video says it in a nut shell. You can learn how to build a business and learn lifetime business skills that you are obviously not learning in college for a portion of the price of coming out of college $90k in debt and no prospects. Which education would you rather have?

Financial Literacy - Is it Time to Change the Model?

The money model that our grandparents used is outdated- It is Time to Change the Model
http://www.bankrate.com/brm/news/financial-literacy/whos-literate-home.asp

The above article was written in 2003 and posted on bankrate.com. I think it's safe to say that it represents the model used by our parents and grandparents. However, I think it's also safe to say that it didn't work for the larger majority of us. Most Americans don't save money like it has been suggested. According to the article older Americans saved but younger Americans considered themselves spenders.  For example, Asians save 20% of their income on a regular basis. They have made it a habit. This is not a habit that Americans have adopted. Therefore, it's time to come up with a new model. 

I suggest checking out Loral Langemeier of http://www.liveoutloud.com/. She suggests that it is time for a new money model that would fit right in with the larger majority of Americans -- Make More Money.

There would still be some changes in mindset, attitude and behavior that would be needed to make the transition a smoother one and Loral and her team can help you with that.

Robert Kiyosaki of Rich Dad fame suggests that savers are losers. Read this article to have a better understanding. http://finance.yahoo.com/expert/article/richricher/1224.

Because you need to understand what happened in order to grasp what is going on now and what you need to know and do to become financially literate because the rules of money have changed.

Are You Financially Literate?

Well, are you? What is financial literacy anyway? According to Wikipedia it is defined as one's ability to understand finance and make judgments about the use and management of one's money. Can you do that? I thought I did but all I did was balance my check book and I didn't even do that well. I was usually off by a few pennies and thought as long as the dollars balanced out, everything was ok. Now I realize that I should have paid more attention to my money because it was getting away from me and I was helping my money to do that -- get away from me.

Now I'm struggling and frustrated.

I have also taken the bull by horns and made a commitment to myself to become financially literate. I started this journey in 2002. I wanted to be RICH but didn't know how to do it or where to start. Well, in order to get RICH, I had to find out how to do that. Fortunately, one night I was up late and saw Robert Kiyosaki. He was speaking about how you can choose to be rich and your house is not an asset and some guy was running on a treadmill for Robert to demonstrate his point. I was intrigued and determined to listen to what this man was talking about.

Of course, he was on late night television selling his product, You Can Choose to Be Rich. And since he was the only one talking about that subject and that is exactly what I wanted to know, I bought the program. Well, I thought it was going to be some magical formula that would automatically turn me into this rich person that I so longed to be. I found out something that kinda really pissed me off and made me angry at Robert Kiyosaki. He made me realize that truly understanding financial literacy is understanding oneself. Learning financial literacy is opening the doors to inside ones self that you really don't want to go. Financial literacy involves a great deal of facing some truths about the individual self. 


So the better question to ask is what does finance mean to you? I think most of us get intimidated because we may associate "finance" and all things related to rich people. I associated finance with stocks, bonds, etc. I never really thought of "finance" having anything to do with me. I saw myself outside of finance not realizing that I am, in fact, the CEO of my life. The life of Simone B. Hardy is a business and it is my business to learn, grow and do the best that I can for myself and my family. My life is my business just like your life, your finances, your money is your business too. We've all heard of budget and save but we don't do it. Now don't get me wrong. I'm sure there are many individuals who are expert savers - my mother was one, but she didn't have all of the answers. What we need is a total package for our best outcome. 


I believe the best book hands down to learn about finance and put yourself in the picture is Robert Kiyosaki's, Rich Dad, Poor Dad. It was written from the perspective of teaching a 9-year old boy about finance. If a child can be taught from this perspective, certainly this book will serve many adults in learning the sometimes intimidating world of "finance". This journey may take a lifetime to complete and then since laws and policies are always changing, you still have to stay on top of the information available to stay informed and have the best information to make the best financial decisions for yourself and your family.