Thursday, August 7, 2014

Entertainment Business Finance - Full Sail University: The Course In Review

I must admit that going into this course I was a bit of a skeptic. What in the world was this “university of artists” going to teach me about finance that I didn’t already know? I am a degreed accountant with fourteen years of experience in corporate financial reporting and business intelligence. What did they possibly know that I had not already learned? The answer is: “plenty.”

As an example, my most recent former boss taught me that my home was my greatest asset and my cheapest liability. From an accounting standpoint, that is true. He has a Master of Accountancy and is a CPA. He told me to pay down all of my other debts first, because they are at a higher interest rate than my mortgage. “Your mortgage is the cheapest debt you will ever own,” he said.

That made perfect sense to me at the time, because I don’t like to pay for the use of someone else’s money. But this course taught me to rethink my strategy, and ask a couple of simple questions:

1.     Would you rather have your credit card company or your mortgage bank upset with you? Let’s hope that neither is the case, but assume you had to choose. Your credit card company cannot make you homeless; your mortgagor can. And your credit card company does not generate gains for you. Your home usually does. So whom do you want to keep happy?
2.     Why is any asset other than my noggin considered to be my greatest asset? Getting back to the example of my incredibly smart former boss, why does he not consider his knowledge to be his greatest asset? It is, after all, his smarts that made him what he is – not his home, his stocks, or bonds, or mutual funds. It is his financial intelligence that will carry him through, even if all of those other assets are gone (Kiyosaki, 2012).

This was a fantastic course in so many ways. But my greatest take-away is this: teach your children about financial intelligence, because they are not likely to get that education in public schools or universities (ironic, huh?).

Kiyosaki, Robert (2012). Rich Dad, Poor Dad. Scottsdale, AZ. Plata Publishing.

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