Ramit Sethi introduces the concept of a "basic language of money": knowing a small set ("4, 6") of key personal financial numbers—for example, what percentage of income you save and invest, and target milestone amounts ($100k, $500k, $1M) and what those sums will provide. He likens understanding these numbers to knowing the rules of the road: you can break them, but you should understand them first.
Most of us do not have even the equivalent knowledge of money. Basic language of money would be, what percentage of your income are you saving and why? What percentage are you investing? When will you have $100,000 or 500,000 or a million dollars? And what will that money get you? Because just having a million dollars in the bank is pointless. This is the basic language of money. You've got to know your key 4, 6 numbers in your life. Not many, just a few. But once you understand those numbers, it's like understanding the speed limit. Understanding the speed limit means you understand a lot. There's a rule of the road. If you go too fast, what's going to happen? Why do these rules exist? And these rules are similar in money. You can break them. That's okay, but you got to understand the rules first.
