Boost Your Financial IQ

June 29, 2011

Having good financial IQ is not about saving tons of money or dumping them into mutual funds. It is developing a healthy relationship money and building a wealth of assets that will generate you money.

What does it take to develop your financial IQ? Delayed gratification is one of the most important aspects to developing yourfinancial IQ. Take this as a hypothetical example. Would you pay for a pint of milk or a cow? If you buy milk, it is consumed and it is over. You will have to buy milk over and over again when it is finished. Even if the milk costs less than a cow, in the long run, you will still be buying milk again and again.

Now, if a cow were to cost 50 times more than milk, you might pay through your nose when you purchase the cow, but after consuming 50 pints worth of milk from the cow, you would break even on your investment and save more money in the future. In fact, the cow might give birth to 2 or more calves and you could sell one of them for profit!