FINANCIAL LITERACY

- The ability to make smart financial decisions that help you achieve the lifestyle
you want
- things including earning, budgeting, paying off debt, saving, investing,
protecting, and
overall managing personal finances

(?) Why is Financial Literacy Important?

- the more financially literate a person is, the more he is inclined to be able to
make better and
smart financial decisions, making him more moneyand increasing effectiveness

(?) How does money work?

- money is essentially a payment to buying goods and services

1. Earning Income
- Earned Income (working for money)
- Profit Income (Business)
- Interest Income (Get paid by lending money)
- Dividend Income (Buying shares)
- Rental Income (Assets)
- Capital Gains (Asset but more $$$)
- Royalty Income (Income by allowing people to use your stuff)

Active or Passive
- Actively work to get paid
- Passively sleep whilst getting paid

2. Investing
- Invest in Stock Market (either self-directed or robo-adviser)

*Self Directed Investing is opening a brokerage account and doing investing

yourself, before
picking a brokerage company to go with, think of what kind of investor you are:
- Growth
- Dividend
- Etf

what markets you want to invest us, canadian, international, and find a broker

once you do find one, you can open (3) accounts

- Cash Account (used once you maximized your TFSA account)
- TFSA (tfsa first, as all capital gains in this account are tax free, alot of
rules too)
- RRSP (contributing to rrsps can only be done in certain situations, research
first)
once you know what accounts to open, then you can do some research on what stocks
and etfs you want to invest in, keep contributing
to your account aswell as research to know if you should hold, sell or buy more
stocks
If this is to much, you can invest with a robo-advisor, with one, all you need to
do is answer a few questions like risk tolerance and money goals
then they will pick a portfolio for you based on your answers, add money and setup
automatic contributions, and it will do everything for you, including investing
your funds and rebalancing your portfolio
amd reinvesting your dividens all for a small fee,

once you reach your goal, withdraw money, and set a new goal*

3. Saving
- spend less money you make, but that's easier said than done, so learn budgeting.

There are (4) main aspects of budgeting:

- needs
- wants
- debt
- savings/investing

track your spending with KOHO, once you start to track your spending, you can see
where your money goes, so you can try and decrease these categories to invest in
your savings

*PAY YOURSELF FIRST!!!*

Setup your account so that when you get paid money will transfer from your checking
into savings
consider when to save and when to invest in savings and reserved emergency funds,
earn a decent interest rate, learn when to save and invest

4. Spending
- weapons of choice:

- cash
- debit card
- credit card
- mastercard or visa

5. Credit
- have a good credit score for better credit cards and loans with better terms and
interest

two types of of debt

bad debt - car loans, credit cards, debt that doesn't pay you back
good debt - student laon, business loan, mortage

Protecting yourself financially:

car insurance, home insurance, life insurance, and business insurance

make sure your assets are protected

SO HOW CAN YOU LEARN ABOUT FINANCIAL LITERACY?

- start with free knowledge like:

youtube
podcasts
blogs

- or maybe step it up like:

books, programs, workshops, mentors and experts

TAKE ACTION!!

ALI ABDAL'S GUIDE TO GETTING RICH