I was speaking on financial intelligence a while back to a group of people of university professors in Singapore.At the end of the talk,one of the professors asked me:

"Where did you learn about business and why do some people make more money than others?"
Responding to the first half of his questions,i referred to my book Rich Dad Poor Dad and explained to him that i had a father who was just like him,a respected and highly intelligent career educator.

My other dad,my best friends father,who also spent many years raising me,was a school dropout,but was a natural financial genius.My business education came from him.

THINKING RATIONALLY vs THINKING EMOTIONALLY
To the second half of the question i replied:"The best business school i attended was Vietnam.In Vietnam i learned what i believe to be my most important skill in life"

"And what is that?"the professor asked.

"To know if i am thinking rationally or emotionally,"i replied."While in combat,i learned to be a master of my emotions and to think clearly,even under extreme pressure."

MOST PEOPLE LIVE IN FEAR OF LOOSING MONEY
"And how has being the master of your emotions been important to your success?"the professor asked.

When it comes to money,it is the emotion of fear that keeps most people poor.Most people live in fear of loosing money or risking money so they say things like 'play it safe'.The professor said"Are you saying be careless?live dangerously?No i replied,"all i am saying is that you need to know when you are thinking emotionally or rationally.When you are emotional,thinking rationally is the hardest thing to do.

Money,sex,religion and politics are emotional subjects.So when it comes to those topics,most people are not thinking rationally.When it comes to money most people are so afraid of loosing that they wind up losing.That is not too intelligent.

HOW YOU RESPOND TO FEAR MAKES THE DIFFERENCE

The primary difference between successful and unsuccessful people are"When it comes to money,i am often going in when others are coming out.Or i take risks,while the masses are playing it safe."i feel the same fears they do,i just use my mind differently.That ability to do what is necessary,in spite of my feelings screaming at me to do otherwise,is the single most impotant life skill i have learned."

The same thing happens financially.People pull back ,play it safe,terrified of making mistakes,while life's opportunities pass them by."There is another type of fear that causes people to loose money,and that is the fear of OSTRACISM,reportedly the number one fear of most humans.

OSTRACISM: is the fear of being different,or standing alone,or being ridiculed by peers.That fear causes people to conform rather than risk being different.In investor language,the fear of ostracism leads to the"Thundering herd'mentality.

The fear of being different causes people to to band together,so they wait for social proof that what they are doing is right.it is also called the 'madness of the crowd'.So they enter markets late,buy what their friends are buying,and get slaughtered.After an experience like that,they spend the rest of their lives living in perpetual fear,continuing to go along with the rest of the crowd and that is not going anywhere financially.

So how does that affect financial intelligence?

Financial intelligence is a 50/50 proposition."50% of financial intelligence is what you learn in business school,or in my case what i learned from my rich dad.It is the so - called technical knowledge about money,accounting,finance,investing and business.

"The other 50% of financial intelligence is knowing when you are thinking rationally and when you are thinking emotionally.To simply say, 'play it safe' is not a rational thought because it is a thought that is generated out of emotion.To say 'play it smart' is a thought coming from the rational brain.

It is that 50/50 relationship that is the basis of financial intelligence, and to answer the question why some people make more money than others.

ROBERT KIYOSAKI IS THE AUTHOR OF RICH DAD'S GUIDE TO INVESTING.

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