Page 35 - Rich Dad's Increase Your Financial IQ: Get Smarter with Your Money

Both have financial intelligence. The one who keeps more money has a
higher financial IQ.

Measuring Financial Intelligence

Financial IQ #1: Making more money. Most of us have enough financial
intelligence to make money. The more money you make, the higher your
financial IQ #1. In other words, a person who earns $1 million a year has a
measurably higher financial IQ #1 than a person who earns $30,000 a year.
And if two people each make $1 million a year and one pays less in taxes

than the other, that person has a higher financial IQ because he or she is
closer to achieving financial integrity by utilizing financial IQ #2:
protecting your money.

We all know that a person may have a high academic IQ and be a genius
in the classroom but be unable to make much money in the real world. I
would say my poor dad, a great teacher and a hardworking man, had a high
academic IQ but a low financial IQ. He did very well in the world of
academia but did poorly in the world of business.

Financial IQ #2: Protecting your money. A simple truth is that the world is
out to take your money. But not all who take your money are crooks or

outlaws. One of the biggest financial predators of our money is taxes.
Governments take our money legally.
If a person has a low financial IQ #2, he or she will pay more in taxes.

An example of financial IQ #2 is someone who pays 20 percent in taxes
versus someone who pays 35 percent in taxes. The person who pays less in
taxes has a measurably higher financial IQ.

Financial IQ #3: Budgeting your money. Budgeting your money requires a
lot of financial intelligence. Many people budget money like a poor person
rather than like a rich person. Many people earn a lot of money but fail to
keep much money, simply because they budget poorly. For example, a

person who earns and spends $70,000 a year has a lower financial IQ #3