5 Great Ways to Improve Your Financial IQ

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Eleven years. If you’re a physician, that’s the minimum amount of time you’ve spent after high school increasing your medical IQ just so you can call yourself a practicing doctor and treat patients. How much time and effort have you spent improving your financial IQ?

While I can’t find any definitive studies correlating Financial IQ and ultimate financial security, it’s obvious – the more you know, the more likely you are to set yourself up for success.

Unfortunately, personal finance isn’t normally taught in schools. How many of you were formally educated on how to balance a budget, credit scores and their implications, retirement plans, real estate, etc.? You have to learn all of this on your own.

It may seem daunting at times, but I believe it’s easier to learn basic personal finance principles than it is to learn Gluconeogenesis and the Krebs cycle in all of its glory. (And most all of you have already learned that at one point or another.) Here’s a refresher for those who might’ve forgotten.

Well, there are resources out there to help you and it just takes some willingness and dedication to self-educate.

All that being said, here are 5 great ways to improve your financial IQ:

1. Read

2. Watch

  • TV – Suze Orman
  • Movies – Netflix, Amazon Prime have great movies on money & finances
  • YouTube – Ask any financial question and you’ll get a video tutorial on it.

3. Listen

4. Talk

  • Friends and Colleagues – How many of you have asked your friends and colleagues how they’re saving for their kids’ college tuition or how they’re preparing for retirement? I started doing that and I’ve learned more in some 5 minute conversations than reading 200+ page books.
  • Family – Find a family member who seems to be in a good place financially and ask what they did to get there.
  • Fellow investors –  Don’t be afraid to go to local investor meetings, like Real Estate Investor Associations. Check Meetup to see if there are like-minded people getting together near you or consider starting one yourself.
  • Experts – Financial advisors, real estate agents, professional investors, etc.

5. Figure out and track your net worth

  • Set your financial goals first. I’ve heard that you should always run with the goal in mind. Great advice. Once I decided I wanted to be a physician, I was able to figure out the path I needed to follow to get there.
  • Then you have to track your progress – your net worth. Without knowing this, it’s almost impossible to assess if you’re getting closer to your goals. I used to use a spreadsheet, but it was too time-consuming to update it constantly so I stopped. Then I found Personal Capital and it’s automated all of this. It not only updates my net worth in real time, but it sends me notifications on my spending.

What other things have helped you improve your Financial IQ?

6 COMMENTS

  1. It is such a shame that we are not educated more (at all?) about finances in school. It should be a mandatory part to some extent starting in elementary school with continuous exposure from then on. I look back and think about those very practical skills we learned early on and think more things like that should be included. Financial literacy would be one of those skills. Beyond the knowledge base the mindset is also critical. I found the best tool for obtaining both knowledge and mindset to be podcasts. For me they are better than books as you can listen to podcasts anywhere you go – in the car, working out, running errands. I would estimate that I listen to at least 10-15 per week. I have a running joke with one friend of mine whenever any question, problem, or issue comes up that needs to be addressed I always say “there’s a podcast for that”!

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