Second Chance summary

There are a number of different views of wealth but one thing is certain: everyone wants to be wealthy. Unfortunately, schools teach people how to be poor instead.

Modern education is designed to turn people into employees, taxpayers and consumers. People often assume that education is the solution to poverty: if you study harder, you’ll get a better job and earn more.

When people say you need to be educated to be wealthy, they usually mean you need to go to university and get a degree. What you actually need is financial education.

Schools don’t teach financial education because it’s too powerful. Financial education means looking beyond traditional explanations and gaining the knowledge necessary to create more assets – and it has the power to make you wealthy. In the past, slaves weren’t allowed to read and write, because it would’ve given them too much power over their owners. These days, most people are deprived of financial education for the same reason.

You might think it’s easy to determine whether someone is rich or poor but it’s actually not that simple. You can still be poor even if you live in a nice house and drive an expensive car.

If you want to change your financial situation, you first need to know where you stand. You need an income statement, where you write down your income and expenses, and a balance sheet where you keep track of your assets and liabilities.

As we’ve seen, having a degree doesn’t necessarily make you wealthier. Financial education is the key to success, but where do you actually start studying?

First, you need to figure out what kind of future you want for yourself. Remember: being wealthy isn’t the most important thing in life. Some people are much happier working a nine-to-five job for their entire life than tackling a high-powered career.

One of the biggest differences between rich and poor people is their intelligence, but it’s not the kind of intelligence measured in school. You’re considered smart in school if you have a good memory and learn to read and write quickly, but in the real world, different skills help you get ahead.

For entrepreneurs, intelligence is all about handling risks and financial losses, learning from mistakes and staying level-headed. Entrepreneurs build their businesses from the ground up using practical skills that are much more important than remembering who the 36th president was.

Most people follow simple rules regarding debt: work hard, stay out of debt and you’ll be OK. But as an entrepreneur, debt might be your new best friend.

Debt can actually be a powerful tool for gaining leverage. Most people assume that if they work harder, they’ll earn more and become rich. In fact, the opposite often happens: they fall into a higher tax rate and earn even less.