Welcome to Human Asia’s Kidpreneurs Money Series – Lesson 3.
In this program, you will learn how to teach your kids the basics of finance. Finance is the basic building block in entrepreneurship, but unfortunately finance is not being taught enough (or at all) at school.
These lessons, spread over many articles on this website, are meant to close that knowledge gap for your kids so that they can enter their careers later in life with a solid foundation of this very important knowledge.
These lessons can either be read by the kids themselves, or you can deliver it to them in the form of instructional teaching – whichever works best for them!
However, make sure that you read from lesson to lesson without skipping as one lesson builds up to the next.
Without further ado, let’s begin Lesson 3 – How to Earn Money!
How to Earn Money
People need income to obtain money. There are many forms of income. It can be received in the form of a salary. It can be earned as a profit from having a business. It can be from an investment. Or it can be a gift from friends and family.
Different Types of Jobs or Careers
Let’s look at some different sources of income.
A. Working for Someone
To earn money, you need to work for it. Most grownups earn money by having jobs. A person who works for someone is called an employee, while the one who provides the job is called the employer.
The employer may be an individual person, a corporation, or the government. The employee receives a salary as payment for the work that was done for the employer.
What does your parent do for a living?
Have you thought of the type of work you want to do when you grow up?
Some jobs pay more, but may require more schooling and training. The list at the end of this article shows some jobs you may want to consider in the future.
When choosing a career, you need to remember this: You should look not only at the salary or the prestige associated with the work. It is also very important that you enjoy the kind of work you do.
B. Working for Yourself Providing Goods or Services
Have you met someone who owns a store, a shop, a business, or a restaurant? These people earn money by working for themselves instead of working for an employer. They are referred to as self-employed or business owners. They make money by having a profit from the business they own.
The profit can be figured out by adding up all the revenues and subtracting all the expenses. The revenues are the income made by the business from selling goods or services. Expenses are the money spent for running the business. Expenses may include the money used to pay for materials, office supplies, equipment, rent, and employee salaries.
The basic formula to figure out profit is: Profit = Revenues – Expenses.
A business makes a profit when the total revenue is greater than the total expenses.
The goal of every self-employed person, just like most business organizations, is to consistently make a good profit.
A profitable business means the owners are making money. The profit can be used to grow and expand the business.
When the expenses are greater than the revenue, the business is experiencing a loss. During a loss, more money goes out than the money that comes in.
No self-employed person or business organization wants to have a loss. If the business continues to experience a loss, the owners may be forced to shut down the business.
Check out the ultimate startup business game for all ages!
Today’s Important Words
Income : money you receive from having a job or providing goods and services
Salary : the payment to the worker for the services done
Business : an activity that brings income through selling goods or services
Employee : a person working for another person or organization for pay
Employer : the person or organization proving the job
Corporation : an organization formed by a group of people acting together ; a corporation can be a company or business too
Self-employed : a person who earns a living by working for himself or herself
Profit : the money made from running a business as a result of having more revenues than expenses
Revenue : the money made from selling goods or services
Expense : the money spent for running the business
List of Some Jobs You Can do when You Grow Up
Dentist and Doctors
Next Lesson : Kidpreneurs Money Lesson 4: The Power Of Money
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