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4 Different Ways To Learn Financial Lessons

After commenting on Mrs Frugal’s cooltobefrugal.com site, on post “Do Your Friends Share Your Financial Values?“,I realize that we learn financial lessons in mainly 4 ways.

  1. Learn from reading books, listening to teachers, and taking financial advice in general.  People that learn this way have the easiest time  picking up the concepts and avoiding major losses.  They quite literally learn from your mistakes so that they will never encounter them!
  2. Learn by ignoring what others have to say, and doing it your own way.  This method of learning is the most ineffective way of learning.  I have to admit, I went through a phase like this at one time.
  3. Learn by watching others and mimicking there actions.  This way is really a hybrid mix of #1 with a splash of  #2.  These people listen to what you say, but they also have to experience it for themselves (to let it sink in).  Still this is much better than #2!
  4. Doing the oppositive from what was trying to be taught.  I have a small subgroup of friends in this category too.

Okay, now here is the meat of this post.  If you ever try to teach your friends or family about finances, only teach the ones that learn using the following numbers: 1,3!  Those groups are trainable!  Life is to short to waste your breath on groups that don’t care!

The problem with #2 is that they aren’t going to do what you teach them anyway!  The are hand-on people that must experience the failures first hand to learn anything!

The problems with #4 is that they think you are trying to trick them or screw them somehow.  This is a suspicious bunch!

People move from from techniques 1 thru 4 at various times in there life.  I’ve been 3 of the above at various points in my life (I’ve never been #4). 

How do you learn financial principals?

-MR

8 Responses to 4 Different Ways To Learn Financial Lessons

  1. I spent a great deal of my life in the second category, always had to learn things the hard way. But I’ve learned enough now that I seek out knowledge and successful mentors so thankfully I think I fall into categories 1 and 3.

  2. MR –

    Right on. The REASON there are hundreds of personal financial books (#1) out there is, like you said, because of a combination of the others (#2-4).

    If you relate it to cooking, the primary ingredients are really out of your control. What you can control is the spices/flavorings. So #2 & #4 aren’t bad – but do so in dashes or sparingly.

  3. @Mrs. Frugal
    Sounds like a wise way to it 🙂

    @FinEngr
    Hmmm, good point!
    Actually, you got me thinking, of the 4 categories:
    2 & 4 may be a bit more artistic/creative or inventive of the groups…

    1 & 3 may be the quicker learners of the groups!!!?

  4. @FinEngr
    I like when I have personal “ahhh” moments. I’m sure there is a more formalized study of the groups above, but this helps me categorize people into groups… I guess I’m a bit of an amateur sociolologist at heart 🙂

  5. I think I definitely prefer option #1. I hope to meet more people who I can mimic (#3), but for right now, I am happy reading about and listening to their adventures to great wealth.