Despite being vital for both personal and societal prosperity, we receive no training in financial intelligence.Being rich is not about being talented or capable. The world is full of such people, and most of them are poor. What they lack, is financial intelligence, an aptitude for financial subjects like investing, accounting etc.Sadly, we aren't raised with this intelligence. Our schooling doesn't cover financial intelligence amongst the myriad of concepts we learn.Since society has left us poorly equipped in terms of financial knowledge, it is up to the individual to educate himself.

Financial Intelligence

To become wealthy, one must learn to take risks.Insanity is defined as doing the same thing over and over again, and expecting different results. If you wish to change your current financial state, you'll need to start handling your finances differently.The biggest change needed is to take risks. Every financially successful person have taken risks to get where they are, and it is so because they manage these risks rather than fear them.Taking those bigger chances and handling those bigger risks will reap higher rewards, and make a bigger income.

Risks

The road to wealth is long, so you must keep yourself motivated.Journey to wealth is hard, long, and trying. It's easy to lose heart when you watch your risky investment suddently tumble. During such setbacks, you'll need to find ways to stay motivated.Make lists of "wants" and "don't wants". Pull these out to remind yourself why you started this journey.Gather more financial knowledge by researching life stories of how wealthy individuals like Warren Buffett overcame their struggles.

Motivation

Laziness and arrogance can drive even financially knowledgeable people to poverty.Personality pitfalls, like laziness and arrogance can hamper and even reverse the journey to wealth. Laziness is ignorance to certain variables, or even avoiding to make the right financial decisions.Arrogance too, is extremely dangerous. Can be defined as a combination of poor financial knowledge and an ego too proud to admit it. Keep these personality pitfalls in check.

Laziness and Arrogance

Fear and greed can drive financially ignorant people to make irrational decisions.If you have money, you are likely to focus on all the new things it can buy (greed). If you don't have it, you worry you might never have enough (fear).People who are ignorant about how to manage their finances are especially prone to letting these emotions drive their decision-making.By building up your financial knowledge about things like investments, risk and debt, you can counter these emotions, and place you in a better position to make rational decisions.

Fear and Greed

Financial self-education and a realistic appraisal of finances are the building blocks of growing wealthy.Earlier you start at building your personal wealth, the better. If you begin at 20, you're far more likely to become rich, than at 30.Set financial goals based on a realistic appraisal of finances. A good look at the income, and expenses helps you plan your future accordingly. Coupled with financial education, there's a good change you'll become wealthy one day.

Realistic appraisal of finances

Your profession pays the bills, but your business is what will make you wealthy.Profession is what you do from 9-5. It is what pays the bills, buys the groceries and covers other living costs.Business, is what you invest your money and time, to grow your assets. Investments in real estate, stock market trading, etc.Your profession often funds your business intially; therefore, it's wise to keep your day job until your business starts to show sustainable growth. When they do, your assets become your main source of income. And that is the sign of true financial independence.

Profession and Business

Understand the tax rules to help you minimize your taxes.By becoming aware of how the "system" works in your country, you may be able to regally reduce how much money the goverment takes from you.

Taxes

Invest in Assets, and avoid LiabilitiesKnowing the difference between an asset and a liabiltiy is necessary to ensure you're making strong investment decisions.Asset - Makes you moneyLiability - Costs you moneyInvest in more assets, like business, stocks, bonds, mutual funds. Anything whose value appreciates over time. Invest your excess income into assets, making money make money.Some liabilities are commonly mistaken for assets. For example, a house to a common man is a huge debt in terms of home loans for a large period of time.

Assets and Liability

Because we're not trained in financial intelligence in school it's up to us as individuals to develop this trait by ourselves. We are only likely to become rich or financially independent once we have both a stronf financial IQ and a firm, ambitious mindset to support it. In the end, what you invest in your mind is what brings you success, because your mind is your most important asset in any financial situation.

A summary

We've collected the most popular hacks to help you reach your financial goals

books

Books

business

Business

moneyandinvestments

Money & Investments

personaldevelopment

Personal Development

How to Succeed at Investing

Although we have been successful in our careers, they have not turned out quite as we expected. We both have changed positions several times-for all the right reasons-but there are no pension plans vesting on our behalf. Our retirement funds are growing only through our individual contributions. Michael and I have a wonderful marriage with three great children. As I write this, two are in college and one is just beginning high school. We have spent a fortune making sure our children have received the best education available. One day in 1996, one of my children came home disillusioned with school. He was bored and tired of studying. “Why should I put time into studying subjects I will never use in real life?” he protested. Without thinking, I responded, “Because if you don't get good grades, you won't get into college.” “Regardless of whether I go to college,” he replied, “I'm going to be rich.”

Kiyosaki is best known for his book Rich Dad, Poor Dad, the #1 New York Times bestseller. Kiyosaki followed with Rich Dad's CASHFLOW Quadrant and Rich Dad's Guide to Investing.

Assets and Liability

Similar ideas to Assets and Liability

Day 1

How to calculate net worth

What is an Index Fund?