Thursday, June 25, 2009

The Secrets About Money That You Don't Learn in School!

First of all, let's get one thing straight:

You are smart! I wanted to make sure you know that from the very beginning. When I was growing up, my dad always told me that everyone is born smart—that every child has a special kind of genius. I loved that idea. Even though I didn't always do well in school, I kind of knew the reason didn't have to do with me. I wasn't stupid. I just learned in a different way than the way teachers in school expected me to.

My father taught me to have a good attitude about learning. He taught me to find my best way of learning. If I hadn't done that, I might have flunked out of high school or college. I probably wouldn't have been prepared for my financial life. And I wouldn't have had the confidence to be who I am today.

We all learn differently. The trick is to find the way you learn best. When you do that, you'll discover your own personal genius.

A genius is someone who excels at something. But a genius isn't necessarily good at everything. In fact, a genius usually has a special ability in one area while being pretty average in others.

Did you know that Albert Einstein, who thought up the theory of relativity (E=mc²), never did well in school? He wasn't good at memorizing things, yet he grew up to become one of the greatest mathematical thinkers of all time. His brain focused on ideas rather than facts. Facts, he said, could be found in books, so he never felt the need to keep facts in his head. He wanted his head clear to think creatively.

School asks us to keep facts in our head, but when we're out of school, we usually just need to know where the facts are kept so we can look them up or know whom to call when we need them!

The way our performance is measured in school has very little to do with how intelligent we really are or how successful we can be. The way we perform in school is usually just a measure of how well we take tests! It's not a true measure of the genius you were born with.

Everyone Is Born a Genius
Take out your notebook again and write a list of people you know. Try to get to twenty names. Include people from school, family members, even teachers. Put your name at the top of the list. Next to each name write down what that person is good at, no matter what it is. Do you have a friend who can't sit still and is always tapping his foot to some beat that's inside his head? Write that down. Can your sister do the crossword puzzle in ten minutes using a pen without even once glancing at the dictionary? Write that down, too. Can you fix almost any computer problem? Put it in the book.

This exercise helps you do a couple of things. It's the first time in your financial journey where you'll be asked to try to see something that you didn't see before, to look at something in a new way. Seeing talents in others you hadn't really recognized leads you to see your own talents. Knowing what your strengths are is one step toward success. Knowing how to detect other people's strengths is also a great skill, since creating a solid, reliable team is critical if you plan to build a business or be an investor someday.

The Myth of IQ and Intelligence

I remember that every once in a while in school, we'd have days when we were given all sorts of tests. The tests were described as "standardized." I was always puzzled by that idea. Every person is unique, so why were we all being evaluated in a cookie-cutter kind of way? The truth is that no two people are alike.

Later I found out that the tests were measuring our IQ, which stands for "intelligence quotient." An IQ number is supposed to represent a person's ability to learn facts, skills, and ideas. But a person's IQ really boils down to this: It's a number that shows the relationship between a person's "mental age" (as measured on a standardized test) and his or her chronological (real) age. Then this number is multiplied by 100 and the result is your IQ. When I was growing up, people thought that an IQ stayed the same for a person's whole life. How limiting! Fortunately, that thinking is changing.

Over the years I've done a lot of reading and research about intelligence, especially about the way people learn. IQ can relate to academics, but it can also relate to other things, like sports. When I was young, I had a high baseball IQ. My friend Andy had a very high academic IQ. Andy had an easier time learning in school because he learned by reading. I learned by doing something first and reading about it later. One formula worked for Andy, and another one worked for me. We each developed our own winning formula.

Everyone Has a Special Learning Style

In those IQ tests in school, only one type of intelligence was being measured: a person's aptitude, or talent, for words. But what if someone's not a word person? I don't especially like to read, so does that mean that I am stuck with a low IQ? Today, the answer is no. In 1983, a psychologist named Howard Gardner published a book called Frames of Mind (Basic Books). In it, he describes seven different types of intelligence, not just one. He also argues that people's IQ can change.

Dr. Gardner's list of intelligences, which he also calls learning styles, has created a new road map for learning new skills and information, whether it's rocket science, threading a needle, or financial literacy.

What's Your Learning Style?

Take a look at this list. As you read it, think about what methods best describe your learning style. Circle the number that matches up for each of the learning styles: 1 is least like you and 5 is most like you.

This is not a test. I repeat: This is not a test! There's no good or bad answer or high or low score. This is just a way to think about how you learn most comfortably.

ooo Verbal-linguistic intelligence

If you always have a book tucked in your backpack, circle 5. This type of intelligence has to do with reading, writing, and language. It's also called being "word smart."
1 2 3 4 5

ooo Numerical intelligence

If you're one of those people who can do a math problem in your head, circle 5. This intelligence is found in people who easily grasp data and numbers. They're also usually calm and rational thinkers.
1 2 3 4 5

ooo Spatial intelligence

If doodling helps you listen in class, or if you're always seeing things that you'd like to photograph, circle 5. This intelligence is used to see patterns, designs, and space—and is found in many artists, architects, and choreographers who can visualize a two- or three-dimensional object or event and make it real.
1 2 3 4 5

ooo Musical intelligence

Are you tapping a pencil or drumming your fingers right now? Head for the number 5. This type of intelligence is especially tuned in to sounds, rhythm, and rhymes.
1 2 3 4 5

ooo Physical intelligence

If you love PE in school, or if your room looks like a sporting-goods store, you're physically intelligent—someone with awareness of how to use your body well, like many athletes and dancers.
1 2 3 4 5

ooo Interpersonal intelligence

Do friendships seem effortless to you (mark 5) or endlessly complicated (mark 1)? Do you always (or never) know what your friends are thinking—or are you somewhere in between? Mark it down. This intelligence refers to the way someone gets along with other people, which is also called "being people smart."
1 2 3 4 5

ooo Intrapersonal intelligence

If interpersonal intelligence is "being people smart," intrapersonal intelligence is "being self-smart," or self-aware. It's also called emotional intelligence, because it relates to the way you handle your emotions, such as fear and anger. Do you understand your own reactions to difficult situations and can you control them? Do you think before you talk back? Are you patient with your own shortcomings and do you take care of your self-esteem?
1 2 3 4 5

Recently Dr. Gardner has come up with an eighth intelligence:

ooo Natural Intelligence

describes a person's sensitivity to the world around him or her. If you enjoy being outdoors every weekend or are involved in school or community groups working for the environment, circle 5.
1 2 3 4 5

I've talked a lot with a psychologist who taught innovative learning at Arizona State University about various learning styles and how they help us achieve personal and financial success. Listening to her thoughts, I've added one more intelligence:

ooo Vision is what determines who will be a leader and who will be a follower. Great leaders can see how a situation will play out and take action in response. Winston Churchill, Prime Minister of England during World War II, was one of the world leaders who was against the Nazis from the start. It's as if he could see the terrible things that would happen if they stayed in power. Those of you with crystal balls, mark 5.
1 2 3 4 5

Robert Kiyosaki says that poor dads and middle class dads teach their kids to get a good education and work 40-60 hours a week at a good job with benefits.

Rich dads teach their kids to spend their 40-60 hours a week getting involved as early as they can with either building up or participating in any kind of income producing asset something that, after it's built up, continues to produce an income.

courtesy of Robert T. Kiyosaki and Sharon L. Lechter

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