“One of the greatest failures of the educational system is the failure to provide financial education to students.”
Those are strong words, and words I believe to be true. This is a quote from Robert Kiyosaki’s book, Increase Your Financial IQ
, and I believe it sets the pace for what this book stands for: Financial education.
Just so we’re clear, this book is not how to get rich, or make money, although Kiyosaki does throw out a few ideas on these matters. No, this book is about increasing your financial knowledge. There is a big difference between the two, and it is important not to purchase this book thinking you will get rich from reading it.
However, there are some great observations Kiyosaki makes about how wealthy people deal with money vs. how middle class people deal with money. He outlines his thoughts in what he calls, the Five Financial IQs -
The Five Financial IQs
- Financial IQ #1: Make More Money
- Financial IQ #2: Protecting your money
- Financial IQ #3: Budgeting your money
- Financial IQ #4: Leveraging your money
- Financial IQ #5: Improving your financial information
Financial IQ #1 – Make More Money. This is a no-brainer, right? Well sometimes it is easier said than done, but Kiyosaki believes anyone can do it. According to RK, making money is all about how you leverage your time and talents. RK is a big fan of business owners working to create alternative and passive income streams instead of trading your time for money.
Financial IQ #2 – Protecting your money. Pay fewer taxes. Kiyosaki is referring to legal ways of reducing your taxes! For many people this is easier said than done, but Kiyosaki gives several examples of how it can be done. Mostly though, he is referring to the types of income and investments you have – for example, owning your own business and using legal business deductions.
Financial IQ #3 - Budgeting your money. The key here is to spend less than you earn. If you budget for a surplus, it will be much easier for you to have extra money to use for step 4 – leveraging your money.
Financial IQ #4 - Leveraging your money. Here, we are talking about investing. Kiyosaki is not talking about investing in mutual funds or stocks, which he things is risky. He recommends investing in real estate, precious metals, or other things you have control over. According to Kiyosaki, he is heavily invested in real estate and he owns a silver mine.
Financial IQ #5 – Improving your financial information. Obviously, you made it this far, so you are doing something right! Seriously though, this goes back to the opening quote of this review. Increasing your financial mindset is one of the most important things you can do for yourself.
Enjoy reading this book.. =)
