What is Financial IQ? Test Your Financial Resilience (2024)

FAQs

What is Financial IQ? Test Your Financial Resilience? ›

INTRODUCING FINANCIAL IQ ^™

Financial Quotient (FQ), sometimes also referred as financial intelligence (FI), financial intelligence quotient (FiQ) or financial IQ, is the ability to obtain and manage one's wealth by understanding how money works. Like emotional quotient (EQ), FQ derived its name from IQ (intelligence quotient).

Financial resilience relates to individuals' ability in coping with financial shock or recovering from financial difficulties (Mcknight and Rucci 2020). Individuals often face challenges in dealing with unexpected shocks such as illness, death of a family member, job loss or natural disaster.

Financial intelligence is a type of business intelligence constituted of the knowledge and skills gained from understanding finance and accounting principles in the business world and understanding how money is being used.

FIQ assesses the understanding, control, preparedness, and confidence a person holds around finances.

Key Takeaways. Intelligence appears to have no direct correlation with wealth. Key examples of this include famed NBA player Earvin "Magic" Johnson Jr. (who is wealthy) and Christopher Michael Langan, an American with a very high IQ (who is much less wealthy).

One study concluded that moving from the 25th to the 75th percentile of IQ correlates with a 10% to 16% boost in earnings. That may feel significant when you get it, but it doesn't push you into a whole new socioeconomic class.

The concept of IQ was invented in the year 1904 by Alfred Binet. The equation used to calculate a person's IQ score is Mental Age / Chronological Age x 100. On most modern IQ tests, the average score will be 100 and the standard deviation of scores will be 15.

How to be financially resilient? ›

Organizational resilience has five primary components — Centering, Confidence, Commitment, Community, and Compassion.

What are the 7 C's of resilience? Pediatrician Dr. Kenneth Ginsburg identified 7 components–the “7 C's of resilience”--that together allow a child to show resilience in the face of life's challenges: competence, confidence, connection, character, contribution, coping, and control.

Start with the basics

Read about creating a spending plan, debt and credit management, mortgages, retirement planning, getting a loan and knowing your consumer rights at MyMoney.gov^* – the U.S. government site dedicated to teaching all of us the basics about financial education.

Proverbs 23:4 Don't wear yourself out trying to get rich. Be wise enough to know when to quit. Ecclesiastes 11:6 Sow your seed in the morning, and at evening let not your hand be idle, for you do not know which will succeed, whether this or that, or whether both will equally do well.