Money Matters: Mastering Financial Literacy and Wealth Building

Yes, money matters and matters a lot. But it’s crucial to understand why and how it influences your life. Let’s explore your relationship with money, bust common financial myths, and lay out a clear roadmap to prosperity.

Why Money Matters So Much: Your Relationship with Money

Your perception about money profoundly influences how you earn, save, and handle your finances. We must unravel our relationship with money to achieve financial well-being.

Ask yourself: Do I believe money is the ultimate measure of success in life? Does money guarantee happiness? Do I need money or the right mindset to make money? Your answers determine your financial trajectory.

BUSTING Common Financial Myths

Misconceptions about money can be roadblocks to achieving your financial goals.

Myth	Reality
Money is the measure of success.	False. How do you measure success of a Doctor ? By the no. of patients they heal or by the amount of money they make ? Success is measured by the value you provide to customers, clients, or employers in exchange for money. Money is NOT the measure of success. Money is a by-product of success.
Money brings happiness.	False. Look around you. Are all wealthy people happy ? or are all happy people wealthy ? Happiness is not directly proportional to money. Money buys comfort, but happiness comes from experiences, purpose, and strong relationships.
It takes money to make money.	False. More than capital, you need a wealth mindset to identify opportunities and attract necessary resources. Many billionaires started from zero.
Formal education is a must for money.	False. World is full of billionaires who have no high profile degrees attached to their names. Quite a few billionaires did not even complete formal school or college education. A degree in itself doesn’t guarantee wealth. You need Financial Literacy and continuously upgraded skills to generate income.
Being wealthy is the same as being rich.	False Richness is about high income; Wealth is about building assets that appreciate over time. Someone who owns a Mercedes car bought with a bank loan may be rich but not necessarily wealthy. Earning high income in itself does not make you wealthy. If you spend all your income in financing expenses, you can never be wealthy. Aim to be wealthy.

---

What Exactly is Money?

What makes money so important ? Why Money occupies so much space in our minds ? What exactky is Money ?

Money is simply a medium of exchange—a universal unit of measurement for giving and receiving goods and services. It replaced the inefficient ancient system of barter by providing a common measure of value.

It flows from above that money is needed to buy necessities & luxuries of life. Money is required to live a comfortable life. The more money you can spend, the more comforts you can buy.

Money as a Carrier of Energy

The exchange of money should be an energetic transaction between receiver & giver. Receiver should feel excited to receive money & giver should feel excited to receive goods / services of matching value in exchange of money. This is possible only when pricing is optimum. Neither over charging nor under charging. Well-earned money carries positive energy. Ill earned money carries negative energy.

Overcoming Common Fears Around Money

Since money is so important, it naturally carries fears, which financial experts identify as:

1. Fear of not having enough: Anxiety about not being able to maintain a desired standard of living in the future , fear of downtrend in business or loss of job
2. Fear of lack of capability: Doubting your ability to earn enough, especially during hard times

These fears negatively impact your financial capabilities. You must remove the scarcity mindset and embrace the truth: The Universe is full of abundance for all. By cultivating gratitude, hope, and positivity, you align yourself with The Universe to receive the financial prosperity you desire.

---

Roadmap to Prosperity and Wealth Building

Achieving financial freedom requires a strategic plan and the right money mindset.

1. Set Your Financial Goals

Be specific about the required amount and time period for goals like owning a house, education of children, going on a vacation , setting up a business etc etc . Categorize them as Short-term (1–2 years), Mid-term (2–5 years), and Long-term (5+ years).

2. Prepare a Financial Plan

Determine the equivalent value of your goods/services needed to achieve your goals. If your current value falls short, focus on enhancement. Monetize your skills effectively.

3. Upgrade and Upskill Yourself

Continuously upgrade & upskill yourself with new knowledge and skills. Invest in learning to raise the value of your services and justify higher earnings.

4. Draw a Budget (The Latte Factor)

Prepare a monthly budget, distinguishing between Non-Discretionary (rent, groceries) and Discretionary (dining out, subscriptions) expenses. As authors of The Latte Factor point out, you are richer than you think; cutting down on small, dispensable purchases (like daily barista coffee) creates significant savings.

5. Follow the Growth Cycle of Money

The core cycle for accumulating riches is: Earn > Save > Invest > Earn > Reinvest.

• Save a part of your income.
• Invest wisely so your money earns for you.
• Reinvest those earnings to reap the benefits of Compounding.

6. Be Sufficiently Insured

Cover yourself and your family with appropriate Life and Health Insurance. A good life term plan and family health insurance provide a crucial safety cushion against financial emergencies.

Roadblocks in the Path of Prosperity

Avoid these habits that silently deplete your wealth:

• Say No to Impulsive Purchases: Always differentiate between Needs & Wants. Do not splurge money on “fancy wants.” As Warren Buffet says, “If you buy things that you don’t need, you may have to sell things that you need.”
• Don’t Show Off: Don’t buy things you don’t need with money you don’t have to impress people who don’t bother about you. The fact is no one is really impressed by your show of affluence. showy affluence often evokes jealousy or desire in others. People are impressed by your growth story, not by your show of affluence. Do you know, Faux Affluence is the tendency to spend more than we earn to impress people who earn more than us.
• Avoid Debt: Do not borrow to finance expenses or assets that depreciate. Debt significantly reduces your ability to save and invest for future income, as interest silently eats away at your earnings. Do you know total household debt ( Personal & Credit Card loans ) in India is about 42% of GDP. And more than 50% of this is towards consumption ( Non housing retail loans).

Conclusion

Money is just a means to live a life of comfort. It can buy you a house, but not a home; a bed, but not sleep. Adopt the right wealth mindset, bust the myths, and set out on the path of earning towards your financial goals. Money in itself is not a measure of success or carrier of happiness. The objective is to live a reasonably comfortable life of Fulfillment, Growth, and Happiness. And as you set on the path of your financial goals, keep enjoying the journey.