How a Student Can Build Wealth Before Graduation

How a Student Can Build Wealth Before Graduation

How a Student Can Build Wealth Before Graduation Day

 

There are means a student can take to build wealth that are easy and quick. Learn the difference between an asset and a liability. According to Robert Kiyosaki, the biggest problem the American student has is not knowing the difference between the two.

 

In a nutshell, a liability is anything that you are spending money on. An asset is anything that brings a net amount of money into your pocket. To illustrate this point I will provide the two scenarios below.

 

Scenario 1, part 1: Buying a car

You buy a brand new car.

  • You have the monthly payment. You financed the purchase of this new car.
  • You have car insurance. You may pay that monthly or yearly.
  • You have to change the oil every so often.
  • You need to put gas in that tank.

Questions to ask yourself:

  • Is this car an asset or liability?
  • When does it become an asset?
  • When does it become a liability?

 

Scenario 1, part 2: Buying a car

  • You buy a brand new car.
  • You have to make the monthly payments. You financed the purchase of this car.
  • You have to pay the insurance premium.
  • You have to put gas in the tank.
  • You use this car to do an Uber side gig.
  • The income from the side gig exceeds what you are spending on the monthly payments, the insurance premium and the purchase of gas.

Questions to ask yourself:

  • Is this car an asset or liability?
  • When does it become an asset?
  • When does it become a liability?

 

Scenario 2, part 1: Buying a home

Believe it or not there are students financially responsible enough to purchase a home while in college.

  • You purchase the home.
  • You have to make the mortgage payment.
  • You have to pay the insurance premium.
  • You have to pay the monthly utilities.

The above is just to start.

Questions to ask yourself:

  • Is this home an asset?
  • Is this home a liability?
  • When does this home become an asset?
  • When does this home become a liability?

 

Scenario 2, part 2: Buying a home

You purchase the home with all of the financial responsibilities in scenario 2, part 1.

  • This home has an apartment upstairs you rent for the total amount of the mortgage and the utilities you pay on the house.
  • Your expenditures are far less than your income.

Now answer these questions:

  • Which is an asset?
  • Which is a liability?

 

Scholars Fund does not advocate debt or endorse it in any way. We acknowledge the fact that many carry debt. We feel the best way to grow wealth while in school is first to eliminate or manage debt.

Garrett Sutton discusses how to turn debt into an asset in his book, The ABCs of Getting Out of Debt: Turn Bad Debt into Good Debt and Bad Credit into Good Credit by Garrett Sutton

We suggest you take a look at the following URL for more information.

 

Eliminating current debt is not easy but it is doable. In the process of eliminating debt, you will learn how to manage it and possibly turn it into an asset.

Learn how to use compound interest.

The American commercial banks will give you a whopping 0.75% interest on money you have in their accounts. Inflation is right now at 4%. Take the 4% and subtract the 0.75% and the difference is what you are losing each year.

Put your money in a tax lien certificate. In this financial vehicle, you are earning anywhere from 9% to 36% compound interest. Do the math. Thirty six percent compound interest minus the 4% inflation and you are winning by at least 32%. Moreover, your money is growing by leaps and bounds.

 

Learn the difference between simple interest and compound interest.

This is discussed in the post found here. Place the URL here.

 

Take one accounting class. Accounting 101 will do. Buy the book Accounting for Dummies.

The straight forward principles found in those pages will change the way you see money and its power.

You may never fall into debt or be broke again. We mean that!

 

Scholars Fund knows of students that have used the methods described in this post. One student graduated and is already earning $72,000. Another student used this method and in the middle of her college career would finish each year with about or above $9,000 after each semester until graduation.

Both students walked away from college with NO TUITION DEBT. The method described above can work for anyone, not just the college student. The methods described in the above paragraphs can work for anyone with a desire to grow wealth and has limited means and time.

If you have any questions send us your inquiry at info@scholarsfund.org.

Leave a Reply

%d bloggers like this: