Building Financial Intelligence with Your Partner

by Susan Paige
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 The financial balancing act.

Since we were little, we have heard it from our parents, neighbors, teachers and well, everyone, that we must do our best in school to ensure we get good grades to get a high-paying job. We are told to work hard and earn money (and pay taxes) every day until we retire. Right now, the retirement age is increasing, so who knows what it will be when millennials are ready to retire on a government-funded pension they may have to be 80 years or even older.

With the increasing popularity of various reality shows where previously unknown people are finding instant fame and fortune for singing, dancing or baking, more and more are striving for a better and richer life without having to work forever. It is in our DNA to strive for recognition and praise, be it on TV, at work or among our friends. Hence, it is no surprise that when receiving a pay raise or winning a huge sum of money, many say they’ll spend it on a new car or an amazing holiday, as in our material world, this will show our success to others.

Escaping to the tranquility of the Seychelles.

Becoming Wealthy

Traditionally, there were only three ways of achieving wealth: work hard, inherit it (or marry someone rich) or win money. Unfortunately, neither of these will be possible for most of us.

Enter Robert Kiyosaki and a book called “Rich Dad Poor Dad.” Originally written in 1997, an updated version was released last year. And everything in it is still relevant today.

Financial Intelligence

According to Kiyosaki, even if we have a degree and a stable job, we shouldn’t expect to become wealthy unless we are financially intelligent. His key advice is to stop working for money (i.e., a salary) and instead, making sure that money works for us (i.e., by investing in income-generating assets). The book goes also offers information on how to achieve it.

Changing Your Mindset

How many times have you seen something you wanted, only to feel deflated when you saw the price tag? Our natural or conditioned reaction is “I can’t afford it.” Instead, Kiyosaki wants us to think “How can I afford it?” Suddenly, there is an opportunity, an open door, rather than a dead end.

Similarly, we have always been told to work hard and earn money. According to Kiyosaki, it is more important to learn (than earn). He recommends that we know a little about a lot. By consistently learning new things, we’ll look at events differently. We’ll also spot opportunities that not many others see.

Too many are afraid to try something new as they are worried they’ll fail. There are quotes littered across the book to encourage you to give things a go, including, for example:

  • “Winning means being unafraid to lose.”
  • “People who avoid failure, also avoid success.”
  • “Failure is part of the process to success.”

Just by changing the way we think and approach everyday life, new opportunities will open to us. However, to succeed, you need to ensure you and your partner are on the same page.

Keeping the Money

“It’s not how much money you make. It’s how much money you keep.”

When working as an employee, you are making the company owners rich. Furthermore, the salary you are paid gets taxed, and by working harder, you get taxed more. Most of us also have mortgages or credit card debt to pay off. After all these deductions, there may be little left, even before we have paid our fixed bills and had some fun.

Having the Money Work for You

To get a measure of our wealth and financial survivability, Kiyosaki asks us to identify how many days we would survive if we stopped working today. Keep in mind wealth is not the same as net worth, which is the difference between assets and liabilities. After all, many assets, including your car and golf clubs are not assets, even if banks will allow you to include them when applying for a mortgage. The reason is once they are sold, they won’t generate any additional money.

By improving your financial intelligence, you’ll understand that real assets will keep on giving and can help you achieve financial independence. Reading “Rich Dad Poor Dad” should hopefully, start you off on your road to financial independence. However, there is no one-size-fits-all solution, and it’ll take a lot of hard work, but so do most regular jobs.

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