Become a Financial Genius

 

Go From Novice to Genius by Raising Your Financial IQ

 People ask me a lot of questions about money and what to do with it. Some questions are specific such as, “Should I invest in stocks? In bonds? In gold or real estate?” Other questions are about IRA’s or other various retirement accounts. But the one of the questions that come up most often is: “What is the best investment?” Today we are going to talk about that, and how you can learn to make that judgment for yourself.

 

Most people focus on trying to find the best investment when true success comes from realizing that all investments are neutral.

That’s right – the success of any investment depends on what you the investor is doing more than on how the product or stock is performing. In fact, two different people can be set up in the exact same investment – one might come out with huge gains and the other end up broke. This is because the value of an investment has everything to do with the financial goals and objectives of the investor. My definition of a good investment is this:

A wise investment is an investment that you understand.

People get caught when they invest in something that is not appropriate for their individual situation. Raising your financial IQ will help you understand what you are investing in and why so that you know what you are doing. There are several ways you can raise your financial IQ:

  • access financial resource tools such as books, classes and workshops from trusted sources and professionals that are Mission Driven Advisors.
  • get clear about your long-term financial and retirement goals
  • work with professionals who seek to raise your IQ, and not just conduct a transaction on your behalf, like a retirement coach

We have all been taught to trust in the wisdom of professionals, but what I recommend is that professionals earn your trust first before you give it away. What you are looking for are people who offer you not only service, but who seek to raise your level of knowledge in their given area.

Give your trust to those retirement planners who help raise your financial IQ while at the same time adding value to your specific situation through co-creation and service.

This applies to your real estate agent, lawyer, Accountant, and any professional whom you rely upon for advice. They should begin with you first, seeking to understand your life situation and objectives. If they don’t start with understanding you first, how can they know if they are helping you or not? The answer is they can’t. An advisor may know all about the best performing mutual fund this year or hot topic, but that doesn’t mean it’s what you should be signing up for right now. In other words,

It’s All About You, Baby!

It’s that simple. A sound partnership begins with the skills of the professional and the goals of you, the client. While I appreciate that my clients trust me, I want them to understand what they’re doing and why they’re doing it. If you understand something, you’re actually gaining wisdom and you can build on that for the rest of your life. But if you’re just doing what I tell you to do for 20 years and then something happens to me, you won’t have grown at all. It is my goal that after working with me, you become a better investor. Things that were risky before are now wise decisions because your financial IQ has been raised.

Successful people understand that it’s the person, not the money, that is the asset.

Seek to find professionals who think this way, and you will be well on your way toward building a team that can help you move forward with towards your RichLife with certainty, not luck.

What have you done to raise your financial IQ? What would you recommend to others?

About Beau Henderson

Beau Henderson is a financial advisor, author, coach, radio personality, and CEO of RichLife Advisors. He has helped over 3,000 clients to not just improve their relationship with money, but to live the life of their dreams.

20 Comments

  1. Sue McKenzie on March 23, 2011 at 1:49 pm

    Beau, this really hits home to me… it’s sound advice! Financial investments can be so confusing, especially in today’s economy… but you’ve just broken it down into something so simple that it breaks the stress right off!

    I appreciate that you want your clients to not just follow you, but to learn and grow along with you so that we become wise and mature! Our best asset is our own life. So very true! And thank you for saying that!



  2. denny hagel on March 23, 2011 at 10:10 pm

    Your ideals and approach is so refreshing especially in this automated disposal society…to have someone, a professional, be concerned with the “person” and rather than the “account” means the world to so many. Thank you for what you share and offer.



  3. Carol Douthitt on March 24, 2011 at 6:19 am

    “A wise investment is an investment that you understand.” ~ This is so true. As for the professional… knowing how much they care is more helpful than how much they know. Thanks for encouraging me to do business with those I like and trust rather than those who reportedly “know the most”.



  4. Rachelle on March 24, 2011 at 11:11 am

    “Most people focus on trying to find the best investment when true success comes from realizing that all investments are neutral.”
    This really hit home with me. A real eyeopener.
    Thanks Beau



  5. Nancy on March 24, 2011 at 11:31 am

    What??? You mean I have to understand what I’m doing with my money? Geez. That blows. In my past life, I had a husband who really knew what to do with money, so I let him. Now that I’m out here on my own, I do have a financial advisor I trust and who’s proven to be worthy of that trust. That being said, I could stand to raise my own financial IQ! Thanks for that poke in the ribs.



  6. Lily Iatridis on March 24, 2011 at 9:19 pm

    Beau, thanks for the great advice! I’ve made mistakes in the past because I didn’t really understand the investment. I think that having the person earn my trust is a fantastic idea!



  7. Sharon on March 26, 2011 at 10:53 am

    Imagine if everyone came from the place that all investments are neutral. Then we would not have such flucuations in the market and people panicking. I do believe that people listen too often to ‘non experts’ and then wonder why they have gotten themselves into trouble.

    Sharon Worsley
    4 Diamond Leader
    http://www.sharonworsley.com/blog



  8. Victoria Gazeley on March 27, 2011 at 5:51 pm

    Love the way you’re able to simplify this topic. Investments are made out to be so incredibly complicated, which is what kept me from making them in the past. Of course, I invested in ‘other things’, such as life lessons, education and business training, but as far as traditional investments are concerned, I’m still looking for the right advisor.



  9. Sharon O'Day on March 28, 2011 at 8:05 am

    In a world where people typically complicate things in order to maintain control over others … the financial world … how refreshing to have someone who brings clarity and simplicity to something so important! Bravo, Beau!



  10. Olga Hermans on April 14, 2011 at 11:40 am

    Thanks Beau for this insight; this has crossed my mind but never thought it through. You clarified it in great detail; very helpful! Thanks Beau (my daughter and I really do like your name)



  11. Sibyl on October 5, 2011 at 11:42 am

    Beau, you offer some great insights.  Thanks for sharing them. 



  12. Rod Arnold on October 5, 2011 at 11:47 am

    Thanks Beau for the great article and great insights. This is a refreshing look at investments, and makes perfect sense. 



  13. Marie on October 5, 2011 at 5:43 pm

    Such great advice.  Having been burned by a bad advisor in the past, I have made sure to do my homework before extending my trust again.  It is up to us to know what we're investing in and to find our own comfort level and not to abdicate that responsibility to someone else.



  14. Norma Doiron@Health, Wellness & Weight Loss on October 5, 2011 at 6:22 pm

    Nice way of explaining investments… great insights.  Makes sense!
    Norma Doiron @The LEARNED Preneur ╰☆╮



  15. Elise Adams on October 5, 2011 at 6:56 pm

    Love this!  And I am positive that you are right.  Without ourselves invested we can't truly create the outcome we want–whether we're speaking about money, relationships or our lifestyles.  Thank you for so clearly stating how important our personal focus is!



  16. shelley on October 5, 2011 at 8:40 pm

    wonderful way to explain investments… i know so many people who just don't understand… 
    Shelley 🙂



  17. Carol Giambri on October 6, 2011 at 1:27 am

    Thank you so much Beau for this great insight you shared.  I have been under the wrong wings for too long. No longer the case. Very informative.



  18. Susan Preston on October 6, 2011 at 11:19 am

    Wow! I love this and agree totally. When we invest in ourselves, that is one investment that we can never lose. Thank you, for sharing this inspiring article 🙂



  19. Betty Nelson on October 6, 2011 at 6:01 pm

    This kind of site is so needed ….I can't tell you……we were not taught this in school and we all suffer from it….



  20. Kelly on October 8, 2011 at 12:32 am

    Sound advice!!! Very informative article!



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