Increase Your Financial IQ- 2

To illustrate the importance of increasing your financial education consider the following quote from Robert Kiyosaki’s book, Rich Dad Poor Dad.

“One believed, ‘Our home is our largest investment and our greatest asset.’ The other believed, ‘My house is a liability, and if your house is your largest investment, you’re in trouble.’”

This shows the difference in mindset between the wealthy and the nonwealthy. We can benefit from different perspectives because if we are thoughtful and open minded they are an educational opportunity.

Why does a wealthy person believe that “if your house is your biggest investment, you’ve in trouble?” This is definitely in contrast to everything the middle class is taught by the financial institutions in our society. Could it be that if we heed their advice they are enriched at our expense? I believe this is the case. 

In a continuing effort to discuss the concept of creating your own unfair financial advantage I’d like to focus on the following three* strategies:

1. Goal Setting – How to set effective goals and how to achieve them.

The best description I’ve heard was from Dave Ramsey. He taught:

I. Goals

1. Be specific
2. Make it measurable
3. Then, add a date
4. What has to be true to make it happen?
5. It has to be your goal (i.e.: not your spouses)
6. Must be in writing
7. Have a big why/reason/vision

II. Set goals in following 8 areas

1. Physical goals,
2. Family goals,
3. Financial goals,
4. Intellectual goals,
5. Professional/Career goals,
6. Spiritual goals,
7. Social goals,
8. Personal goals

2. Initiative – The ability to assess and take action on strategies intended to resolve any difficulty; to take a fresh approach on something needing to be accomplished. And the power to take charge and complete tasks before others do. **

Initiative is vital to accomplishing anything. Initiative is also a superpower. With it, you will soon learn that anything is possible. Armed with this knowledge nothing can stop you from achieving your desires.

3. Develop your Financial Savvy – Spend time and effort on your financial education. We went to school to ostensibly learn to read and write better… How did that turn out for most of us? Since there was no avenue to gain a financial education we must create our own. In a nutshell, the easiest way to start your financial education is to learn the successful habits of the wealthy and make them your own.

Read about the things the wealthy do and adopt those items that will increase your financial IQ. 

Consider Jim Rohn’s comment, “Poor people have big TVs, rich people have big libraries.”

It’s up to you. You can continue doing those things you’ve always done or set to the task, like the wealthy, read books and trade publications, attend seminars and workshops, and hire several financial coaches. 

What will you make of your future? Bigger TVs or more books?

* See related article: Increase Your Financial IQ – 1 and Increase Your Financial IQ – 3

See original article Money doesn’t make Education Better! But What Does

** See Top 30 Skills document