Thursday, September 28, 2006

Principle #16 - Invest In Your Education

There is a statistical correlation between formal education and both income levels and wealth. This is logical - education makes better paying jobs accessible. People who earn more do, on average, accumulate greater wealth than those with lesser degrees of education. There are, of course exceptions. But the averages show a positive correlation between academic achievement and financial achievement.

Education does not start and stop with schools and universities. Education, especially self education, is a life long affair. The world changes. Financial markets are in a state of constant change. Ideas that were profitable or sensible investment strategies at some times can and do become unprofitable or imprudent at other times. Education means keeping your knowledge of the markets and the forces that move the markets up to date. It means being ready to adapt to new ideas.

We live at a point in history which has been described as the information age. The internet and other technologyl advances have made more information available to more people more quickly and cheaply than at any point in history. This makes it both easier to keep on top of developments and inexcusable not to. How many books on investments or related matters do you read each month? How much time do you spend reviewing the wealth of information which is available for free on the internet? How much time do you spend discussing investments with your friends and other acquaintances? All of these are forms of education.

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