How to Increase Your Financial Awareness
“Instead of letting your hardships and failures discourage or exhaust you, let them inspire you. Let them make you even hungrier to succeed.” Michelle Obama, Former United States 1st Lady
At age 4, I distinctly remember my teacher asking me about my parents. Up until that time (and a while after), I never met them. Outside of photos, I didn’t know who they were. I didn’t know who I was. I didn’t have any answers.
We all go through adversity, in various ways but in equal measure.
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Embedded Issues that Financial Awareness Uncovers
By 2019, I’d worked with over 1,000 very unique people; each, with a thousand stories.
For two semesters, I spend every other Friday at my local community college offering free financial literacy advice. When the opportunity arose, I spend my entire day as a JAHero at the local Junior Achievement (JA) Financial Park mentoring middle school students on financial literacy and the hard adult decisions that they will have to face. I drafted over 60 financial literacy articles and provided one-on-one coaching to clients. I’ve put in more than 10,000+ hours.
Here’s the big secret; “you have issues, and it’s not the money.“
Turns out, you suffer from a common condition. You are human and you are likely dealing with money trauma.
Making More Won’t Solve Your Problems
If you had access to money; you are likely too impulsive, compulsive, or too loose with spending your money.
For some, the extreme lack of money necessitates the drive and greed of accumulating money. Some are extreme misers; having watched their parents lose sleep over not having enough. Others were hurt by money, so they seek to flaunt to subtly hurt others. It reminds me of my 4-yr old pain; the kind of pain that persists until your first paycheck.
You can make $40,000 or even $150,000 per year; it’s materially cosmetic. A fatter bank account wouldn’t add much to your bottom line if you didn’t; 1. Keep more of what you earned, 2. Spent less than what you needed, and 3. Grow more than you expected.
I lived long enough to meet people who lament being High Earners Not Rich Yet (HENRYs) living in DC. It’s fascinating. I grew up in Haiti; I’ve known many who died happy making less than $15,000 per year. There is a point on the hedonic treadmill where we all hit the plateau.
Your net worth is a tell-all adult report card. It reveals all the imperfections that people mask behind angles, filters, and clever captions. I promise you that mastering your net worth and personal value system will do more good for you in the short and long run. Making more money will not solve your problems.
Don’t just money master the game, master yourself.
In 2019, my net worth grew by more than 100%. It’s incredible to think that my savings made $25,000 through market (Mkt) growth on its own.
Even now, I still don’t want a grandiose home. I don’t want a fast car or the latest outfit. I’m merely happy. Last year, we traveled to 13 countries. This year, we slowed it down to 5.
We are getting married. On top of that, I don’t want to carry wedding debt into 2021. We have our work cut out for us. If all the victories come harder or not at all, we’ll just have to try again the next day and the next day. Our daily emotional disposition when it comes to money (now) is best described as “Comfortable AF“. For emergencies, what used to be mild money panic attacks are reduced to simple transactions, and hope they take credit for those sweet travel reward points.
Transactions Without Stress nor Anxiety
Life (finally) clicked. It was all possible because of our collective Financial Intelligence. To quote Trey Songz, “I supposed… I just want to be successful”.
At FINCON 2019, I met authors, experts, YouTubers, podcasters, stockbrokers, dividend investors, and real estate moguls; one thing became abundantly clear – “Success is a dynamic personal equation.”
The Financial Intelligence Equation
Bill Gates, Oprah Winfrey, Beyoncé, Richard Branson, Steve Jobs, Arianna Huffington, Ray Dalio and etc.; all seem to have that “It factor”. They mastered their financial equation.
Your Financial Intelligence is comprised of three parts: Intelligence Quotient (IQ) + Emotional Quotient or Emotional Intelligence (EQ) + Adversity Quotient. Those who can quickly assess their weaknesses, mask or complement them instantly become successful.
The Obama Factor
One person that encompasses #FI in its mastery, is former United States President Barack Obama. He was an absolute trifecta. Barack Obama was smart enough to recognize what he needed to learn and work on. He is resourceful enough in high-stress situations. Situational(ly) aware enough when it comes to people. It’s rare to see someone with the ability to disarm a nuclear conversation in real time. Similar to Trevor Noah’s approach to How To Win An Argument Without Making Enemies.
You can learn a lot from watching his speeches. He flowed dynamically through each component of the equation. His delivery is sophisticated but doesn’t belittle your intelligence or your concerns, rehearsed but naturally improvisational; all while addressing his own shortcomings and challenges. The guy was and still is nationally adored. Even his detractors wouldn’t pass on the photo op. In contrast, Donald Trump is his own brand.
We can all agree that President Trump is generally disliked. Trump is also highly successful. Though he rarely ever leans toward a positive emotional quotient (EQ) when it comes to being tactful with others.
Being Successful with Words
In fact, it’s the total opposite, he complements his lower EQ for an insanely high IQ and AQ. He is smarter than some might perceive. Additionally, he seems to withstand a daily amount of onslaught from his detractors, who would sooner die than be in a picture with him. Trump deals with adversity, even if it leads him to Twitter.
That’s the secret to this equation. You don’t have to be the best in all three sections.
Cashing in on Your IQ
So how do you go about improving your IQ? If you aren’t the kid who graduated from college at 12, most genius is hard-earned. You have to first learn from others through teachings, books, and philosophies. Second, you have to invest in yourself beyond your daily requirements. You then have to learn to teach yourself. And finally, you have to teach others.
Hard Earned
Researchers found those teaching others increased their own retention by 90%. I would also suggest that in sharpening your own knowledge, the act of teaching creates an opportunity to refine your thoughts, making your mind evermore effective.
Demon Slayer anime (available on HULU) did a great job illustrating this. After months of physical, mental, and spiritual training, the lead character (Tanjiro Kamado) learned the fundamentals. On top of that, for another full year, he had to teach himself. He trained to exhaustion and repeated failure. He learned “You are the master of your own destiny.“
If you want to be rich and successful, 1. Unlearn the terrible lessons that you might have been taught, 2. Open yourself up to learn new strategies and life principles, and 3. you have to be willing to change.
The glass is neither half full or half empty; if you are thirsty, just drink.
How to Improve Your Money EQ
Research suggests that there are 27 distinct human emotions, with the six basic emotions being Happiness, Sadness, Fear, Disgust, Anger, and Surprise. We don’t often remember a face, however, you will remember how that person made you feel. The same can be said for faces printed on money.
Money EQ is the innate impression that shared experiences leave on us.
When it comes to having a persuasive or heightened money EQ; 1. Unlink spending with your happiness, 2. Strive to neutralize (not pacify) toxic and/or ineffective people, and 3. Become a solution driver versus the bearer of bad news.
Let go of the need to feel the childish void. You do not need the next tennis shoe when you have a closet for them. That’s just the inner kid in you still seeking social revenge. Let go of the need to keep up with your friends, most of them are only keeping up with you. It’s a vicious debt cycle.
The Financially Abused
Be cautious of emotional + financial abuse. Any financial desperation is an invitation for added trauma. Ever notice the most gimmicky quick-rich tactics play on your fears and insecurities? “Hey, you want to be a Girl Boss!” Try to avoid fast making money decisions when you are emotionally depleted, it’s the same as going to the grocery store hungry. It doesn’t end well at the cashier.
Recognize that saying “No” doesn’t make you a bad person. You are merely setting boundaries.
How to Leverage Your AQ through Financial Awareness
Turns out in the gym, you can get stronger by adding more weight. It’s ok to move past your plateau.
We all know that person that bends and folds like Origami when the going gets tough. The same can be said about your AQ with money. Your Adversity Quotient (AQ) is measured by your ability to deal with tough times. The word, “resilience” comes to mind.
Struggling with the world
To improve your AQ; remember that the struggle wasn’t meant to be lived into perpetuity (best stated by Marcus Garrett of Paychecks and Balances). Like riding a bike for the first time, or even rollerblading; the pain is there, however, the success comes to those who can adapt. It doesn’t mean you learn to adapt in an instant. However working through it, and knowing when and where the next hit is coming is crucial to building future muscle memory. Over time, you will notice that the situation might still be difficult but the way you resolve it will make things far easier.
Beware of over-resilience. You aren’t a sledgehammer and even those eventually break. Be mindful not to get stuck, going, and going. You might be going about it the wrong way for years.
Our AQ is akin to our spirit. It’s a driving force. It doesn’t quit. It doesn’t waver. If you nurture it constructively, it will alert you to danger. Those with low AQ often reach for Anger and scapegoating, however as a person that was beaten by a guy with one leg during a half-marathon, life has infinite possibilities.
What’s The Right Blend?
By now, you are starting to realize that there isn’t one right or wrong way to go about this. This is not a simple answer. You are a composite of all three sections. Some of which fall into the old adage of knowing thyself. Evaluating our weaknesses and working toward improving them.
Highly Functional without Breaking Down
You can be a high-functioning IQ + AQ and have zero sensitivity like Steve Jobs or you can learn to improve your own EQ like Mark Zuckerberg. No one is stuck in a myopic space. You are allowed to adapt, empathize, and learn along the way.
In contrast, you can be a high-functioning AQ however being stuck in one category is harder to completely own and win at the game of life. You can be EQ + AQ dominant and drive yourself into complete exhaustion catering to a crowd. Or, you can use those elements to push yourself further than you ever thought possible.
Those who are high-functioning EQs have it the hardest. The bleeding heart of giving and sharing with nothing in return isn’t practical in the long term. Even an experienced lifeguard can drown trying to save multiple frantic people. A dose of learning the power of NO can add to your AQ. Learning about your monetary effect on others can improve your money IQ as well. Every dollar given can reduce the other party’s autonomy while increasing their dependency. It’s important to learn that you are unique.
The Benefits of Financial Awareness: Acknowledgment of the Gifts of Your Uniqueness
That very uniqueness is your key to financial success or the cell to unbridled debt.
In the end, this is your starting line. This is where you set off on your own adventure to learn how to teach yourself. This is where you start to believe in yourself.
Accessing your full range will help you increase your net worth by 4x, 7x, 10x, and 20x.
The reason is, you would engage where others quit, learn what others neglect, and grow where others retreat.
Written by Lawrence Gonzalez @GQ_Accountant on Instagram, and Twitter
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