difhood55

@@@@@ Mutual funds are popular because they represent safetyAverage mutual fund buyers are too busy working to pay taxes and mortgages, save for their children's college and pay off credit cards They do not have time to study to learn how to invest, so they rely on the expertise of the manager of a mutual fundAlso, because the mutual fund includes many different types of investments, they feel their money is safer because ii is "diversified This group of educated middle class subscribes to the "diversify" dogma put out by mutual fund brokers and financial planners The real tragedy is that the lack of early financial education is what creates the risk faced by average middle class peopleThe reason they have to play it safe is because their financial positions are tenuous at best Their balance sheets are not balancedThey are loaded with liabilities, with no real assets that generate incomeTypically, their only source of income is their paycheckTheir livelihood becomes entirely dependent on their employer So when genuine "deals of a lifetime" come along, those same people cannot take advantage of the opportunityThey must play it safe, simply because they are working so hard, are taxed to the max, and are loaded with debt As I said at the start of this section, the most important rule is to know the difference between an asset and a liability Once you understand the difference, concentrate your efforts on only buying income-generating assets That's the best way to get started on a path to becoming rich Keep doing that, and your asset column will growFocus on keeping liabilities and expenses downThis will make more money available to continue pouring into the asset columnSoon, the asset base will be so deep that you can afford to look at more speculative investments Investments that may have returns of 100 percent to infinityInvestments that for $5,000 are soon turned into $1 million or moreInvestments that the middle class calls "too risky The investment is not risky It's the lack of simple financial intelligence, beginning with financial literacy, that causes the individual to be "too risky," If you do what the masses do, you get the following pict