Importance of Financial Literacy


Have you ever been considered “how long you want to work in your life?” Here I mean to say how long you will continue with your job. How much amount you thought is sufficient after your retirement? Or you planned that before your retirement you accumulate at least 1crore in your bank account. Have you ever prepared your retirement with the above thinking? Or you are in a group of those people who think earn and spend today we will start savings in the future. If you are in those people, then you are ruining your present and future as well. If you have calculated 1crore is sufficient but do not know the actual value of this after your age of 60 then you are not financially literate. You will be more frustrated as you will move in your life year on year. During my bedtime, the concept of this article strikes my mind. And this article will let you know how much importance of financial literacy is.


Suppose your age is 30 years today & you fixed you will retire at the age of 60 years. That means you have 30 years to work more. Now, you are getting ₹70K per month salary at the age of 30 & 20% goes into your savings or investments. Your 20% saving is approx.₹14K per month.

Here, I took 20% savings from your monthly salary because it is an average saving that you must save monthly. Suppose your target to accumulate ₹1crore after retirement. If you invest your saving amount in SIP @ 12% return you will get approx.₹4.9 crore after 30 years.

But in India, the average inflation rate is 7% that is eroding your savings and decreasing the purchasing power. The actual value of your ₹4.9crore is equal to ₹65lacs only, after 30 years. That means, you have the ₹ 4.9 crores in your bank account, but it equals to only ₹65lacs in today’s time. (Read article on Power of Compounding)

Now, the question is, do you think 65lacs is sufficient for your retirement? That shows how much is important financial literacy for any individual.

On the other hand, if you are on another category who thought earn and spend today & say savings will start in the future, then the future will come but, you cannot see the future. 

Now, if you wanted ₹1Cr. genuine value after inflation (7%) in your account then, you must have ₹7.5crore after 30 years in your bank account. This amount equals to 1cr value. You can check this calculation in the below calculator:

Furthermore, to get this ₹7.5crore in your account you must invest ₹21500/- per month @ 12% interest rate for 30 years.

To get ₹21500/- savings you need ₹1.075lacs salary per month right starting from the age of 30years.


Robert Kiyosaki recently posted an article where he explains about new rule of money, i.e.

“Since money is becoming worthless and less, learn to print your own.”

The example which I have written is perfectly related to this statement. With the above example, you can clearly understand that the money is getting worth less and less daily. The purchasing power of money is weakening every day. 

We also dealing with the COVID-19 impact which greatly affects the economy. Also, there is a headline in a newspaper, that “An estimated 12.2 crore Indians lost their job during the coronavirus lockdown in April: CMIE”.

In this kind of environment, it is very difficult for a job person to get their ₹1crore value of money after their retirement.

But still, there is one solution to achieve this target is by getting hands into Entrepreneurship. There is no other way.

The Indian government is giving a very good opportunity to Indian people in their plan “Atam Nirbhar Bharat.”

Also, Robert Kiyosaki spreads valuable financial knowledge thru his quadrants to know how money works.

According to him, employees and self-employee are the people who work for money. And the business owners and the investors are the people where money works for them.

Kiyosaki further explains, if you want to print your own money, you cannot be an employee or self-employed. Employees do not own the machine; they work for the machine. Self-employed persons also do not own the machine; they own a job for money printing machine.


In the end, I will only say high qualifications without knowing the importance of financial literacy will not give you anything. If you wanted to learn and print your own money you must understand the importance of financial literacy. The lack of financial literacy will keep you in the same position whole life where you start.

Any person can only retire early when he/she has understood well the importance of financial literacy. Here are few people who achieve financial freedom early in their life like Robert Kiyosaki, Mark Zuckerberg, Warren Buffet, Elon Musk, Mukesh Ambani, Radha Kishanan Damani, and Rakesh Jhunjhunwala.

“You can also be financially free just to follow what they do; not to follow what the whole world does”

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