Robert Kiyosaki talks about the importance of “financial education” over and over and over again. And the reason he talks about it so much is because he’s right – financial education is the most important type of education to have if you ever want to get out of the “rat race” and become financially independent.

People need to understand basic financial terms, how the money and banking system works in their country, and how credit, income, and other factors all interplay to produce a person’s overall financial status. Even if people are in a bad financial status and already know that, it’s important to understand how they got there, what all the good and bad stuff means, and how to start making changes.

The absolute best resource that I have ever found on the Internet for basic personal finance information is at http://www.GetRichSlow.com. Seriously, you can delete all your bookmarks to CNN/Money, Kiplinger’s, Motley Fool, and all the other personal finance portals out there and learn everything you really need to know from GetRichSlow.com. The beauty of this web site is that it was put up in 1996 and literally has not been updated since then. This makes all the examples on mortgage rates, housing prices, salaries, college costs, etc. a bit outdated, but the principles themselves are still valid and probably will be for as long as we have our current style of economic systems in capitalist countries.

So, if you’re just starting out, read GetRichSlow.com….every page. It’ll take a couple hours for the average person, but it could quite likely be the most valuable reading you ever do, in financial terms.

Now, when it comes to financial education and business, we enter the world of a very, very, very broad range of things. Here are just some of the things that a new business owner has to think about: how to set up your business entity, how to get paid and accept payments (credit cards, merchant accounts and other methods), how to deal with inventory or drop shipping, how to deal with websites, web hosting, domain names and e-mails, accounting and taxes, business plans, affiliate programs, start up money and financing options, cost analysis, insurance, budgeting, record keeping, licensing concerns, setting goals, staying motivated, and marketing.

Look at it: That’s a boat load of stuff!

And once you start learning all this stuff, it can become overwhelming. The sheer number of books, tapes, courses, gurus, etc. that are out there trying to teach all this stuff is phenomenal. Weeding through it all can itself become a full time job.

Every business owner needs to understand the basics of all those things, too. But where on Earth do you start???

First off, visit your local library or bookstore and grab the most generic looking book you can find about starting a small business. There are some good titles in the “…for Dummies” and “Idiot’s Guide to…” series. Barron’s also publishes a great series on business startup and small business topics. I would also encourage you to look up your local Small Business Administration (SBA) office and see what seminars they have in your local area. They are often free or very low cost. Your local Chamber of Commerce can also be a great resource.

Once you have the basics of all those areas covered, and even after you’ve become proficient in a number of areas, you need to ALWAYS be learning. Continueing education is a requirement in many professions, and it should be important to you as a small business owner, also.

Here’s an example. I like to consider myself fairly intelligent and pretty well educated on the basics of most business topics. When I got into real estate investing a little over 4 years ago, I had to overcome a steep learning curve about real estate, and I continue to learn more and more about real estate and related areas of the process.

Along the way, I took the class to become a licensed real estate broker. I also took a loan origination course, became a certified housing inspector in a very niche specialty, and am also contemplating taking the registered appraiser course next year.

People ask me why I do these things. These courses, certifications, and licensing are all mainly part of continueing my financial education, but they also bring certain perks. For example, being a real estate broker allow me to have direct access to the MLS, quicker comps, and certain databases that my local MLS service subscribes to for agent’s to use. On top of that, it’s a great side income.

Although I don’t actually originate loans, it’s nice to be able to keep up on the changing scope of interest rates and products without constantly bugging my own mortgage broker. In addition, if I ever find a deal that I really want to do for some reason, and saving money on origination fees and closing costs makes the difference between being able to buy the property or not, I can originate my own loan myself and save quite a bit of money.

Being an insurance hazard inspector and now a certified federal disaster housing inspector has taught me many things about what to look for in a property that I didn’t know 2 years ago, and has also provided a steady source of income that helps me get through the ups and down of my other business operations.

And why take the appraiser course? Not to become a licensed appraiser, but to get a better idea of where appraisers are coming from when they do MY appraisals.

All of these things contribute to the overall picture of real estate investor education. I would encourage you to seek similar continueing education in your own area of business. While continueing to learn your trade or business, you might also pick up industry certifications, licenses, etc. along the way that open doors to increased credibility, special resources, and additional revenue sources that might not have existed before.

After a personal financial disaster, most people are left wondering what to do next. In fact, significant financial loss is such an incredible psychological setback to some people that they feel there is nothing they can do to recover from it. Divorce, suicide, and other tragic events occur every day because Americans find themselves in financial ruin.

This is going to be a multi-part series of articles discussing the process of financial recovery. I will be basing this series on both my own experience with financial recovery, which is just beginning as I write this, and the lives of people that I have entered due to their quest for tax debt relief.

The first place to start is to define financial disaster. Just because you’re deep in debt doesn’t necessarily mean that you’re in complete financial ruin. Different people are all going to have their own interpretation of what it means to be financial ruined, but for the purposes of this series of articles I’m going to use my own definition. Here are the things I classify as financially destroyed:

• Straight up insolvency.
• You qualify for chapter 7 bankruptcy.
• You just lost your primary residence to foreclosure (or eviction because you couldn’t pay rent).
• Creditors have seized assets, levied bank accounts, and garnished wages.

There are probably more things I could put on this list, but I think you get the idea. This situation can be created by any number of factors, too. Business failure, expensive medical problems, divorce, inability to pay tax debt, extended job loss, poor money management, stupidity…all of these can contribute to being broke and belly up.

Also, you don’t necessarily need to be homeless and jobless to be financially ruined. There are very high income earners that get deep into debt, just as there are low income earners that turn into millionaires over time.

After defining financial disaster for yourself, the next important step is to take a reality check and admit to the fact that you’re there, or are approaching it. People tend to live in denial when it comes to their financial situation, if they even know what their financial position is at all. It’s important to take stock of where you, including analyzing your income and expenses and looking at your assets and liabilities. If that starts to sound like a budgetary counseling session in progress, it’s because it is. Your finances are one of those few things about yourself and your life that you can distinctly quantify, and you can’t figure out how to get where you’re going if you don’t know where you are.

In the next article in this series, we’ll get into the process of figuring out where you are and making decisions about your plan for financial recovery.

To your success,

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