Home » Have you measured your Financial IQ, how well do you really understand Money & Debt?

Have you measured your Financial IQ, how well do you really understand Money & Debt?

financial-iq Whenever I meet with a new client or have a live seminar whether it is offline or online.  I always ask, this question,  “Where does money come from?”

You will be surprised by the responses, that I get from adults who are over the age of 30yrs old.  Who have no idea where money comes from!

Many adults really believe that money comes from working a “JOB”.  This article is not to bash jobs, my goal is to help you understand that there is a direct  correlation between “Money” and “Debt.”

If you do not know where money comes from, there is a good chance you do not know how to eliminate or manage debt.

Let’s talk about Money for a second, money is generated from income.  So if were clear that money comes from income, then what kind of income are you generating is it Active or Passive?

Most individuals are only familiar with Active income, this is income that you exchange hours for dollars.  If I work “X” amount of hours then I will get “X” amount of pay.  If my salary is “X” then that is how much income I will generate personally from my job.

Passive income  is income that’s generate from assets you own or assets you create.  You do not have to work for Passive income, the income that is generated from the assets is based on how well he asset is performing.  The great thing about Passive income it is totally different from Active income it is not based on how hard you work or how many hours you work.

That is why I explain to people if you understand the source of where you money comes from you do not have to make the excuse I got into debt because I lost my job or my job reduce my hours, so I am no longer generating the same income to pay my bills.

Most people who are unable to pay their bills and  get into debt because they do not understand how money works, and when you do not understand how money works you are unable to manage your Personal Finances.

We as a society have been conditioned to create more liabilities and expenses which could result in an overwhelming amount of debt.  Instead of focusing on Money that can be generating by Active & Passive income sources.

Everyone needs a combination of both income sources of income in order to combat debt!  Individuals who go into debt are relying on one source of income, which never exceeds the amount of debt one has accumulated.

When you understand the correlation between Money & Debt, many of financial woes can be eliminated.

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One Response to “Have you measured your Financial IQ, how well do you really understand Money & Debt?”

  1. […] are over the age of 30yrs old.  Who have no idea where money comes from! Many adults really believeRead more… Related […]

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