In my previous post I spoke about What Financial Intelligence is and How solving money problems makes you smarter and increases your Financial IQ. In case you’ve missed it you can Read it here.

As a chartered accountant, it is my passion to educate people on this subject. In part 3 of this blog series I would like to share some further insights with you derived from Financial IQ guru Robert Kiyosaki.

The Cause of Poverty

Poverty is simply having more problems than solutions. Poverty is caused by a person’s being overwhelmed by problems he or she cannot solve. Not all causes of poverty are financial problems – they can be because of drug addictions, marrying the wrong person, not having adequate job skills, or not being able to afford health care.

Some of today’s financial problems are caused by circumstances beyond an individual’s control, problems that have more to do with our government and smoke-and-mirrors economy, that stem from poor economic policies or corruption.

The Rules of Money Have Changed

In 1971, President Nixon took the U.S Dollar off the gold standard. This was a poor economic policy that changed the rules of money. It is one of the biggest financial changes in history, yet few people are aware of this change and its effect on the world economy today. In 1971 the U.S Dollar died because it was no longer money – it became currency.

The word currency comes from the word “current”, like an electrical current. The word means movement. In simple terms, currency needs to keep moving. If it stops moving, it rapidly loses value. If people lose their trust in a currency, the value of the currency plummets to zero and inflation explodes.

Under the old rules of capitalism, it was financially smart to save money. But in the new capitalism, it’s financial insanity to save a currency. In the new capitalism a currency must keep moving from asset to asset. A currency’s purpose is to acquire assets – assets that are either appreciating in value or producing cash flow.

How the Poor Handle Money Problems

The poor see money problems only as problems. Many feel they are victims of money. They think that if they had more money, their money problems would be over. Little do they know that their attitude towards money problems is the problem.

How the Middle-Class Handle Money Problems

While the poor are victims of money, the middle class are prisoners of money. Instead of solving the money problem, they think they can outsmart their money problems. The middle class will spend their money to go to school, so they can get a secure job. They buy a house, commute to work, play it safe, climb the corporate ladder, and save for retirement.

At the age of fifty, many middle-aged people discover that they are a prisoner in their own office. Instead of becoming entrepreneurs, they work for entrepreneurs. Instead of investing, they turn their money over to financial experts to manage their money.

How the Rich Handle Money Problems

When the rich have money problems, they use their financial intelligence and integrity, developed through solving problems with the five financial intelligences, to solve those problems. If the rich don’t know the answer to their problem, they seek out experts who can help solve their problem. The rich don’t quit. They learn. And by learning, they grow richer.

As the prophet Hosea put it so eloquently, “My people are destroyed for a lack of knowledge”.

In my next post I will be discussing the first of these five financial intelligences the rich use to solve their money problems.

Yours in Wealth


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