Financial intelligence and Financial Education
Financial intelligence and financial education seems to be buzz words these days. Many marketers go out and promote “feel good” advice and courses that makes one feel great, but lack any substance.
The issue has a lot to do with our characters and the marshmallow test. We love instant gratification and that feeling that everything is going to be okay.
I received some fascinating statistics recently around how many people do not have any retirement savings and will be financially ruined if they lost their job – but let’s not bore you with these stats.
Before you start
Before you start increasing your financial intelligence, you need to get rid of your stinking thinking. Here’s some thoughts to get you thinking about financial intelligence before we jump in:
- This is not a quick fix. Self control over your money takes time
- Dedicate time to grow
- Choose to learn so that you can earn at a later time
Financial Intelligence 101.1: Get motivated
The reality is that people still dread the idea of finances – and trainers and marketers know this. I mean, who would want to do a course if it wasn’t exciting and give you the opportunity to retire early? Motivation is good – it energizes us to for more and get more done.
Do things that will motivate you to learn more. Here are some of my personal ways of staying motivated:
- Play games
- I play Cashflow Quadrant. This gets me thinking about how I work with my money
- Have conversations about it with people you trust
- People who are truly interested in your well-being will encourage you to keep going
- Track your number (Net worth)
- Monitor how your debt goes down and your net worth goes up
Financial Intelligence 101.2: Start dreaming
When we can’t dream any longer we die.
– Emma Gold
We were created to be dreamers – achievers of great things, yet sometimes people, debt and circumstances kill our dreams. I take the example of “I dreamed a dream” from Les Miserables, where their dream faded away. We should make every effort to not lie down and die, but to get up and keep on going.
To make sure your dreams do not just fade away, you need to keep them in sight and in mind. Write them down Put them on your fridge, on the mirror in lipstick and in your wallet – and work with a plan to move things forward.
Whether your dream is to be debt free, financially independent, own a property, or retire young – never let your dreams go. You might want to tweak them, but don’t discard them. Plan to make them a reality.
Financial Intelligence 101.3: Get Educated
The “it takes money” myth
There’s a myth I would like to debunk: Does it cost money to grow? Nope – but people don’t value things they get for free. Before you spend money on education, consider the following:
- Don’t spend money on courses with people promising you the world by ‘secret’ knowledge.
- Make sure you know you will be getting your money’s worth – e.g. ask for a personal consultation first to test the water (which you will pay for much less than the full course).
- Ask yourself questions like: “How would I use this? Is this in my interest? What is the impact this has on my finances and knowledge?”
- Spend money on things that will be worth it in the long run, not on doodads and sensationalism
Practical education that matters
I think it’s worth spending money on education and financial education. It’s also wise to make sure you will be able to practice what you’ve learnt. Whenever you take a course, ask yourself if you will be able to practically apply what you’ve learnt.
Proof from my life
I want to give you some practical examples of what I’ve done in the past and the impact this has had, because I believe in the quote: “Doctor, heal yourself” – If I cannot prove to you that I am applying my knowledge, it’s sort of a fad.
- I spent quite some time on a board of trustees and emersing myself in the sectional title industry – my reward is that I know a good deal when I spot one in certain areas.
- I paid for a 6 month social media management course through Unisa. You will find this is only one of my projects I have on social media where I am getting some traction.
- I spent quite a lot of (midnight) hours upskilling myself to learn to code. This opened up doors for me to move into software development – and had a huge effect on my finances.
Financial education ideas for you
1. Do an (online) couse
Udemy and Coursera, just to name a few can offer courses that can upskill you in finances – from accounting to budgeting.
2. Read books
If you’re lazy, do audiobooks – there’s even free online PDFs if you google a bit. I recommend books like “The richest man in Babylon” for starters.
3. Connect with wise people
Find and connect with people more intelligent than yourself – the return compounds. You can check out meetups, twitter or other opportunities.
4. Play Cashflow online
I know there’s a lot of Kiyosaki haters, but his game has some fundimental ideas that’s worth exploring. Go here to play online for free.
5. Get apps to help
Start using apps to track your everyday spending (e.g. 22seven) and other apps to help you invest more (e.g. EasyEquities).
6. Get professional advice
Don’t just take people’s word for it – when you’re ready to make a jump, it’s worth paying someone by the hour for their wisdom.
Financial Intelligence 101.4: Get Mentored
Surround yourself with likeminded people – the return multiplies.
There’s a split for me between getting mentored and seeking professional advice. Getting mentored is about exploring and growing, where financial advice should be when you cannot find the answer to a specific question or set of questions, and it will affect your money significantly.
Find people that will sit with you and unpack your budget. Remember that money is one of the five pillars on which your ego is built, so treat it carefully.
Consider the following in your coaching sessions:
- Where are you now?
- Where do you want to be?
- Do a SWOT analysis of your money (strengths, weaknesses, opportunities and threats)
- Explore things that add value to your life and things that do not.
Grow some more.
The only way you will increase your financial intelligence is by growing and becoming more than what you are.
I would like to encourage you to start dreaming and that this will propel you forward to start researching and training yourself in the world of personal finances.
Article reposted with permission from Frugal Local.