How about EQ or Emotional quotient? Do working hard, having a great attitude and a positive mindset solve our financial situation? These are important when running a business, but let me illustrate:
If you are driving from Miami to New York using the wrong road map, you wont get to your destination no matter how fast you drive your car (working hard)! You can work harder, but you would only get to the wrong destination faster! You may have the best attitude in the world or the most positive mindset, but you still wont get to New York (although the journey wouldnt bother you since you are feeling positive about it)
You must FIRST invest in your Financial IQ. Having good a financial IQ is not about saving tons of money or dumping it into mutual funds based on some free financial advice. That is less than beginner investing. It is developing a healthy relationship with money and building a wealth of assets that will generate money for you in the future.
What does it take to develop your financial IQ? Delayed gratification is one of the most important aspects to developing your financial IQ.
Take this as a hypothetical example. Would you rather 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 the 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!
Get the idea? EVERYONE is capable of creating wealth. When you take a beat up old car and give it an overhaul, paint it with a new coat of paint, and change a few more parts to make it start running again, you could sell that car for more money than when it was just a beat up old car. You would have created wealth in the process!
How about a farm? If you turn a farm into a country home getaway resort, wouldnt the value of the farm land increase many times?
It is the same principle for chefs, computer programmers and craftsmen. The sum of the whole is greater than the parts. We are all capable of creating wealth even out of thin air and that is the first step to getting our creative juices flowing.
The value of anything is defined by supply and demand. You dont need to be an economics major to understand this. Money is just an idea. The true measurement of money is not the cents or dollars it represents. It is the value that money can be exchanged for.
If you have developed a product that people want, would they pay more to you than to some one else? Would you apply your skills in creating good assets if you knew that people would see the value in you, that the asset is you plus the asset?
The bottom line is this: Invest in assets that bring long term value. Anything that brings you more income is an asset. Dont invest too much in liabilities like cars or boats. Thats not investing, thats spending.
Even houses are not considered assets until they are fully paid off (If you lost your job tomorrow and you cant pay for your house, is your house an asset or liability?)
Are you willing to step out of your comfort zone and pay the price for financial education or ignore the signs of the times and expect your boss (who may fire you) the government and the bank to take care of you financially for the rest of your life, living below your potential, and never taking risks to better your familys future? You are the only one who can answer that.