5 Ways To Improve Your Financial IQ

The IQ or intelligence quotient is a measurement of your intelligence. The higher your IQ, the smarter you are. However, the IQ only measures academic performance. It doesn’t determine financial growth. Financial IQ is an entirely different form of intelligence. The latter is your only ticket to achieving financial freedom and security. It's not your high grades in school that will make you rich, it’s knowing how money really works. Financial intelligence means you know how to make smart decisions to help you build and maintain wealth. You should increase your financial IQ in the same way that you build your business portfolio. Why?

  • It will improve the quality of your finances.
  • It’s an investment that no one can take away from you.
  • It will give you peace of mind.
  • You can keep building wealth.
  • It will secure your future.

There are many ways to become financially intelligent, and here are some of them:

1. Talk to the experts

Connect with businessmen, brokers, and financial advisors. Start by asking them a series of questions about personal finance or entrepreneurship. They sure can give good insights and advice. Just a little reminder though: make sure you verify the information you get from these experts as they may give you conflicting advice. True financial intelligence is knowing what particular financial strategy to use.

2. Read books

You can start with Freakonomics or Rich Dad Poor Dad. These are good books written by financial experts. Find time to also read informative blogs on personal finance. Read and apply what you have learned. The best teacher is still experience.

3. Start investing and smart small

Learning is a process. It’s by learning how to make money that you continue getting more money. Invest in something you are familiar with and calculate the risks involved. Don’t be afraid to make mistakes as the learning process will be different for each person. Just make sure you learn from every mistake you make.

4. Know the fundamentals of Financial Management

Do you know what Balance Sheets and Income Statements are? How about Assets and Liabilities? Some businessmen rely too much on their accountants or financial advisors when it comes to Finance. Knowing the basics is crucial to improving your financial intelligence. The fundamentals are a pre-requisite to your success.

5. One size doesn’t fit all

One expert might tell you to pay all of your debt and another will tell you to invest in good debt to make more money. An investor might talk about his successes in the stock market and another businessman would vow that real estate is the way to go. There are different strategies in building wealth or generating income. Knowing what you are good at or what works best for you is important. A financial decision can make or break your future. It is imperative that you know how to make smart decisions.

When it comes to money, knowledge is power. Invest in your financial education and reap all the benefits.

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