Develop your Financial IQLooking to develop your Financial IQ? You answered yes, right? Good. Developing your financial IQ is extremely important. One of the reasons why so many people are in debt is because they don't have a financial IQ.
If you want to gain financial freedom, being aware of your financial situation is critical. Robert Kiyosaki's book "Rich Dad's Increase Your Financial IQ: Getting Richer by Getting Smarter", teaches you how to develop your financial IQ.
“One of the greatest failures of the educational system is the failure to provide financial education to students.” -Robert T. Kiyosaki
Here are the five things that Robert Kiyosaki believes will help you develop your Financial IQ: #1: Make More MoneyYes, this sounds simple. Make more money and you'll have more money. Well, its not just about making money. It’s about how you make that money, and how much time it takes.
If you have to work 80 hours a week to make money, then you are not leveraging your time and efforts very well. If you are able to leverage your time, then you are able to make more money.
The best way to leverage is to earn a passive income. This way you are not trading your time for money. Sounds good, doesn't it? #2: Protect your moneyOK, this doesn't mean protect your money so that someone doesn't steal it from you. Although, that is a good idea too! Protecting your money means keeping more of it.
The way you can keep more of your money is by paying fewer taxes. No one likes to pay taxes. If they do, they are crazy. There are many legal ways to gain tax deductions.
One way of getting more deductions is by owning your own business. Increase and develop your financial IQ by knowing what you can deduct from your taxes. #3: Budget your moneySounds remedial, doesn't it? This is one thing that many of us forget to do- budget our money! Ever look at your bank balance and wonder where all of your money goes?
Chances are, you spend your money on a lot of unnecessary things. Look at what you spend your money on, it may surprise you. Sit down and plan a budget. In order to get out of debt, you must spend less than you earn.
When planning your budget, make sure to allocate some money to leverage. #4: Leverage your moneyNotice how leverage keeps coming up? This is because it is very important. You must learn to make your money work for you. If you are working for your money, you have it all backwards.
One way Kiyosaki suggests for you to leverage your money is through investments. What Kiyosaki considers investments are investments in real estate or precious metals. He's not talking about stocks where you could lose your money. #5: Improve your financial informationThe final way Robert Kiyosaki believes you can develop your financial IQ is by increasing what you know about financials.
You can never know too much when it comes to your money: how to make more of it and keep more of it. Increasing your financial knowledge is one of the best things you can do for yourself and your family.
Rich Dad’s Increase Your Financial IQ Test1. Which of the following is not an asset?A. Gold
2. On average, Americans save how much of their income? A. Enough to buy a new flat screen TV
3. A retirement plan that is paid for by your employer is known as a: A. Defined benefit plan
4. What kind of income is the hardest to protect from financial predators such as taxes? A. The dividends that just got cut from the financial stocks you bought
5. What is the best way to create a budget surplus? A. Cut down on expenses by buying a fuel efficient car
6. An example of leveraging your money is: A. Putting money in an interest bearing savings account
7. The best way to invest is in a diverse portfolio of stocks, bonds, and mutual funds. A. True
8. The key to becoming wealthy is: A. Only having two scotches per night
Answers: B, C, C, C, C, B, B, D.
How'd you do? To learn more about how to develop your financial IQ, read Robert Kiyosaki's book "Rich Dad's Increase Your Financial IQ: Getting Richer by Getting Smarter".
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