Education Is A Key Factor In Wealth Creation

Education is a factor for economic prosperity and social development in modern society. Secondly, education allows its owner to earn a higher income, self-expression, creative fulfillment, and moral satisfaction from current activities. The life of educated people is not only longer, but also more fulfilling and informative. Moreover, people with a higher level of education are happier also.

The relationship between education and wealth is also robust. Of course, earning a higher income makes saving easier, and saving is necessary to build wealth. Those with lower incomes have a flatter (non-humped) income pattern, which makes saving and paying down debt more difficult. But those with a higher level of education also tend to make financial decisions that contribute to building wealth. It is important to realize, however, that anyone can follow the financial behaviors that well-educated families tend to practice, such as these:

Have Some Liquid Assets

Liquid assets can help to relieve financial distress during a difficult time without selling assets or accumulating debt. Liquid assets include savings accounts, stocks, and bonds.

Diversify

Diversifying means investing in various financial instruments to reduce risk. In addition to tangible assets such as houses and cars, those with higher levels of education also tend to hold a larger share of their savings in stocks, bonds, and businesses, which tend to provide higher returns (but also more risk of loss).

Keep Debt Low Relative To Assets

Those with low debt relative to assets pay lower interest rates. Those with high debt relative to assets pay higher interest rates which could make it difficult to save. And, over extended periods, both savings and debt are susceptible to the effects of compound interest—which means that savings (or debt) can grow at exponential rates over time.

It is important to realize, however, that the relationship between education, income, and wealth is more complicated than simply more education yielding a higher income and wealth. Factors such as natural ability and family background also impact income and wealth and are not caused by having more education.

Income and wealth inequality increased in the United States for decades. Research indicates that the level of education is strongly related to income and wealth. Households with higher levels of education tend to have more liquid assets to withstand financial storms, diversify their savings (investments), and maintain low levels of debt relative to assets. These financial behaviors are effective strategies for building income into wealth. Because wealth building can be tied to financial decision-making. Financial literacy could help to reduce wealth inequality over time.

Do you want to create wealth? The simple answer is to get educated at one of the Donnish Hub Educational Limited partner institutions. We guarantee to help you to fulfill your dreams.

For Inquiries & Applications

For detailed information and application, please, contact Donnish Hub Educational Limited at +234 817 973 0282 or email admission@donnishhub.com.ng. You can also download our brochure at www.donnishhub.com.ng