Financial IQ refers to the ability to make one’s money grow by spending wisely, saving, and investing right.
But, as a human, it is natural for a person to crave material things that we don’t have yet. It is in our nature to dream of having the latest gadgets like iPhones or Xbox or even to be able to buy our own car.
We can spend our income on buying more stuff, but in the long term, we might not have enough savings for our future. And this is where investment and having a developed Financial IQ come in.
What comes into your mind when you hear the word investing?
Does it mean, putting your money into insurance, mutual funds, the stock market, or even high-yield investments?
Other people might only think about investing when they are about to die. Some even shiver when they hear the word. Often, they are claiming that they have no money to invest or feel that it’s too complicated a subject to discuss.
Many people even invest heavily in health supplements, personal trainers, and beauticians to make themselves live longer, healthier, or even look younger! Imagine the advertising budget for beauty companies nowadays.
All these are legitimate concerns when it comes to investing. But, we are talking about the most important investment a person can make in his/her lifetime – Yourself!
Because if you don’t invest in yourself, who else will?
Investing in yourself means that you are taking the responsibility of educating yourself.
Education – not in the academic or technical sense, but rather – educating yourself on how you will be able to secure your future, have the IQ to where you should put your money – wisely!
Having a good financial IQ is not about saving tons of money or just dumping money into mutual funds. It is developing a healthy relationship with money and building a wealth of assets that will generate income.
What does it take to develop your financial IQ?
Delayed gratification is one of the most important aspects of developing your financial IQ.
Everyone is capable of creating wealth. When you take a beat-up old car and give it an overhaul, paint it with a new coat of paint, and change a few more parts to make it start running again, you could sell that car for more money than if it was just a beat-up old car. You would have created wealth in the process!
When you become a member of online shops so you don’t have to drive to the store to buy, you are making a wise decision of conserving time and fuel. Also, you get alerts during sales and earn incentives and bonus points for your patronage. Rakuten, Honey, and Instacart are perfect examples of online shops offering great deals to their customers.
Invest in something that you know will bring you money in the long term. And this will allow you to take control of your finances.