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5 Ways to Increase Your Financial IQ

by Sally Kelsies

The famous author of “Rich Dad Poor Dad,” Robert T. Kiyosaki outlined 5 important lessons that would help people increase their financial IQ. In this article, we will discuss each of these lessons in detail and provide tips on how you can apply them to your own life. Increasing your financial IQ is one of the best things you can do for yourself and your family!

Learning How to Make More Money

The first type of financial IQ covered in “Rich Dad Poor Dad” is your ability to make more money. This can be done in a variety of ways, but the most important thing is that you’re always looking for ways to increase your income.

One way to increase your income according to Robert T. Kiyosaki is to start your own business. He says that being an entrepreneur is one of the best things you can do for your financial future. Not only will you make more money, but you’ll also have more control over your finances.

Another way to make more money is to invest in yourself. This means taking the time to learn new skills and knowledge that can help you make more money. It also includes things like getting a better education or investing in your health. Finally, he educates people on the importance of owning passive income-producing assets to increase their financial IQ. He generally recommends investing in real estate and businesses because they are more tax-efficient, which protects your money

Protecting Your Money

Often when people earn money, they do not know how to protect their money. Being able to protect your money from financial predators such as inflation, taxes, and fees is critical to financial IQ.

Robert T. Kiyosaki, author of “Rich Dad Poor Dad”, says that the best way to protect your money is to start investing in assets. An asset is something that puts money in your pocket, such as a rental property or a business. By investing in assets, you’re able to earn passive income. This protects your money from things like inflation and taxes.

Another way to protect your money is by having multiple streams of income. This means having more than one inflow of cash, such as a job, a business, side gig, investments, and so on. This diversification will protect you if one source of income dries up.

Budgeting Your Money

By managing the flow of currency in and out of your life, you take control of your financial destiny. A budget is a tool that allows us to do just that.

Budgeting your money is one of the most important things you can do for your financial future. It allows you to see where your money is going and make changes accordingly. It also helps you make sure you’re not spending more than you’re bringing in, which can ruin your financial future.

People with poor financial IQ in this category will not know how to stay disciplined and will often buy liabilities. This can be known as “lifestyle inflation” and is one of the biggest financial traps people fall into.

Another term for this is called “keeping up with the Joneses.” This is when people spend money they don’t have to impress others. It’s a race to the bottom and is a surefire way to ruin your financial future.

If you are looking to start a budget, check out these budgeting apps that can make the process easier. They surely will be “Rich Dad Poor Dad” approved.

Leveraging Your Money

Leverage is the use of debt to increase your returns. When used correctly, it can be a powerful tool to help you reach your financial goals. However, when used incorrectly, it can be disastrous. That’s why it’s important to understand how to use leverage before using it in your own life.

There are two types of leverage: good and bad. Good leverage is when you use debt to buy assets, such as a rental property or a business. This can help you reach your financial goals faster because you’re using other people’s money to make money for yourself.

Bad leverage is when you use debt to buy liabilities, such as a new car or a boat. This can ruin your financial future because you’re using debt to buy things that will depreciate in value and not make you any money.

If you already have extra cash, you can leverage that money to work for you. This is better than having it sit in a bank account because inflation will eventually eat away at its value.

In “Rich Dad Poor Dad”, Kiyosaki explains that ever since Richard Nixon took the dollar off the gold standard, US dollars became ‘currency’ not ‘money’. This is because the US dollar is no longer backed by anything of value. Currency is derived from the word ‘current’ and relates to how the flow of fiat money should be used to acquire assets, and not to stay in savings accounts gathering dust.

Improving Your Financial Information

The fifth and final financial IQ tip from “Rich Dad Poor Dad” has to do with consistently learning and improving your financial information. You can easily do this by reading books, taking courses, or attending seminars.

You can also get a financial IQ by listening to audio programs or watching videos. Whatever method you choose, the important thing is that you’re constantly learning and improving your financial information so that you can make better decisions with your money.

Of course, the Rich Dad Poor Dad brand is filled with financial IQ tips like these. Financial IQ is a critical part of Robert T. Kiyosaki’s teachings, and it’s something that everyone should strive to improve. Since you read this article you have improved your financial IQ. Make sure to continue reading more articles on this website to become more financially intelligent.

By increasing your financial IQ, you’ll be able to make more money and reach your financial goals faster. So start learning and improving today!

Increase Your Financial IQ Today

Improving your financial IQ is important because it allows you to make more money and reach your financial goals faster. Financial IQ will help relieve stress, improve your relationships, and give you a better shot at achieving success. Start by learning the five financial IQ tips mentioned in this article.

You may have a strong financial IQ in one section, but need to spend more time developing another. Financial IQ is like a muscle – the more you use it, the stronger it becomes. And just like physical fitness, there are financial IQ exercises you can do to improve your overall score. The important thing is to keep learning and growing so that you can reach your full potential.

By being well-rounded in these sectors of financial IQ, you’ll be setting yourself up for a bright future. Financial IQ is an important part of life, and it’s something that everyone should strive to improve. Everyone uses money, so everyone can benefit from learning how to use it more effectively.

Here is a summary of the five most important lessons to take away from Robert T. Kiyosaki’s Rich Dad Poor Dad advice:

  1. Financial IQ is just as important as your IQ.
  2. Protect the money that you earn.
  3. Start investing in your future.
  4. Get out of bad debt and only use debt to buy assets.
  5. Be financially responsible by learning more about finances.

Increasing your financial IQ is a lifelong journey, but it’s worth taking. By following Robert T. Kiyosaki’s advice, you can set yourself up for a bright financial future. So what are you waiting for? Start increasing your financial IQ today!

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