Page 34 - Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money

Chapter 2

The Five Financial IQs

There are five basic financial IQs. They are:

Financial IQ #1: Making more money.
Financial IQ #2: Protecting your money.
Financial IQ #3: Budgeting your money.
Financial IQ #4: Leveraging your money.
Financial IQ #5: Improving your financial information.

Financial Intelligence vs. Financial IQ

Most of us know that a person with a mental IQ of 130 is supposedly
smarter than a person with an IQ of 95. The same parallels can be drawn

with financial IQ. You can be the equivalent of a genius when it comes to
academic intelligence, but the equivalent of a moron when it comes to
financial intelligence.
Often I am asked, “What is the difference between financial intelligence
and financial IQ?” My reply is, “Financial intelligence is that part of our

mental intelligence we use to solve our financial problems. Financial IQ is
the measurement of that intelligence. It is how we quantify our financial
intelligence. For example, if I earn $100,000 and pay 20 percent in taxes, I

have a higher financial IQ than someone who earns $100,000 and pays 50
percent in taxes.”
In this example, the person who earns a net $80,000 after taxes has a
higher financial IQ than the person who earns a net $50,000 after taxes.