Increase Your Financial IQ

One more book from Rich Dad and Poor Dad series. Since first time read RDPD years ago, I haven’t really followed it. Until these days, I started become more serious about personal financial stuff, and began to pick up what have been left. I think it is great to reinforce RDPD concepts before you start doing planning or investing. The most important value I see from RDPD is it does help me to think the changing meaning of money itself, and how the rules of the game have been changed over time, and how we should take advantage of it rather than being ripped off.

Even though I have only read three books of Rob Kiyosaki, the content is not much different. They are taking about the same concepts. Maybe that’s another reason I like them since these concepts are actually simple, that point is whether you really get it or not, and take action or not.

This book particularly focuses on the importance of increasing financial IQ, which is what I have been looking for to get some start-on. Again, RK’s book is not a how-to guidebook, but rather, it reinforces Rich Dad’s financial philosophy as to why your financial IQ determines your wealth and how it works in different aspects of the game of the money in a holistic way.

Personally, I don’t suggest you to buy this book, but highly recommend you to read it. It is easy to catch the take-away, but it is just a matter of how you do with the take-away.

Five aspects of financial IQ that RK stressed:

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

KEY POINTS

• Not tool but the information, the knowledge makes you rich
• Getting smarter to get rich
• Rule of money changes on 1) currency 2) retirement
• Financial intelligence > professional and academic intelligence
• Your ATTITUDE to money and financial problem matters! Being rich is not evil
• Popular advice and social expectation is wrong! Get the good job…
• Why you are solving other’s problem not yours? Why lazy about your problems?
• Be good at the game that you can be at
• Answer is about the past and ability is about the future
• Profession: something that people pay you to solve
• Entrepreneur: sales skill mattersà invest in what you need to become whom you want to be
• If you cannot beat them, then join them
• It’s the PROCESS makes you rich, not moneyà learning process
• LEARN form the failure, get stick to/with the process until you win
• You can quit when you are winning, but never quit because you are losing
• Stick to something you know, ask yourself, and CHOOSE challenge CAREFULLYà image what would be like if you take on and succeed
• Life is about learning, and learning is about adventure. That’s true intelligence
• JOB is not ASSET, you should work for asset, set the goal for your asset
• Earned income X but passive income O (cash inflow that doesn’t require you working )
• You solve the problem to get rich
• Excess income>reducing expense
• Reprioritize your spending habits
• Budgeting surplusà come up short earlyà force you solve the problemà earn more money à pay yourself first
• Utilize the environment to force you to learn
• Save: gold in certificate
• Time and Money is most important asset
• ONLY assent column is yours
• Use assent to pay liability. Spend to get rich
• Invest in cash flow (control, fact), not capital gain (without control, only opinion, paper asset)
• Rule and Law matters!
• Make the trend becomes your friend, intelligence is the ability to take the info and make it meaningful
• Assessment: look at 1) niche (brand) 2) leverage 3) expandability 4) predictability
• Don’t be average! Above average financially, not only academically and professionally
• Subconscious, addiction
• Neuron Mirror: importance of your environment and the perceptions of yourself à you change yourself by changing the environment around you, and by changing the perception about yourself!
• Environment: where you genius can grow and develop, where challenges yourself to improve your standard of living and financial intelligence
• Don’t play safe, don’t be an office prison, don’t get lazy, you have to learn from lesson but success
• Dedication, Drive to win, Courage