The world-famous author of Huckleberry Finn, Mark Twain, once said, “There are two times in a man’s life when he should not speculate: when he can’t afford it, and when he can.” Twain’s advice came from personal experience. In today’s dollars he earned millions, was addicted to risk, loved investing—but impatient with detail. He reportedly told his accountant to send him a financial statement his daughter could understand—she was two. He declared bankruptcy in 1894.

Sir Issac Newton, the greatest mathematician and scientist of his time, was a wealthy man and a conservative investor most of his life. Yet, in 1720 he got caught up in the South Sea Company stock market mania and lost half of his life’s savings. A man who calculated logarithms to 50 places had failed to do the math.

The natural brilliance that fueled Twain’s creative genius and Newton’s cognitive capacity for math and science abandoned them when it came to the comparatively mundane task of managing their financial affairs.

What happened?

Humble, Hardworking, Old-World Thrift

As a young real estate agent knocking on doors looking for listings, I met many immigrant families who owned their own homes. My would-be clients often spoke broken English and worked in the trades, on construction sites or in the city’s sanitation department. They weren’t sophisticated in any obvious way. They were family people who embraced an old-world thrift made evident by their full vegetable gardens, homemade bread, and their humble well-maintained homes.

I always enjoyed my visits with these friendly families but left my meetings confused.
How had these humble, hardworking, blue collar immigrants been able to buy a home—and a rental property around the corner—when my parents were tenants their whole lives? Was there a unique form of intelligence, a financial intelligence, that some people have, and others don’t?

I believe there is.

financial intelligence (FQ)    noun

– a combination of age-old financial wisdom, (rules or principals), guided by a healthy dose of emotional intelligence, or EQ, (self-awareness, self-discipline, motivation, and the ability to embrace short-term sacrifice for long-term gain).

I suspect that many of my real estate prospects may not have known what an SAT score was. But they had qualities that were far more important. They were motivated, persistent, determined, and humble. They had self-awareness, self-control, and the ability to delay gratification. They knew and embraced the idea of short-term sacrifice for long-term gain.

“One of psychology’s open secrets is the relative inability of grades, IQ, or SAT scores, despite their popular mystique, to predict unerringly who will succeed in life.”

—Daniel Goleman, Emotional Intelligence

Dr Daniel Goleman, author of “Emotional Intelligence: Why it can matter more than IQ” makes the case that emotional intelligence, qualities like self-awareness, self-control, motivation, and the ability to delay gratification, are greater predictors of life-success than a person’s IQ or SAT scores.

Goleman acknowledges that there is a relationship between IQ and how someone’s life turns out. People with low IQs often end up in low-paying, menial jobs, and people with high IQs sometimes end up in well-paying jobs. But his research suggests that this is not always the case. Goleman believes academic intelligence is being oversold, that there is an overemphasis in academia, and society in general, on IQ as a predictor of success. That people with high IQs can be stunningly poor pilots of their personal lives. And, that IQ contributes only 20 percent to the factors that determine life-success. This leaves 80 percent to other forces.

Academic Achievement Is Being Oversold

Canadians are recognized as some of the friendliest, polite, beer drinking people in the world. That’s until you put a hockey stick in our hands. Our national identities are tied to this sport. Which is why I was standing in a cold arena, at 7 am, on a Saturday morning in 2008.

Like every hockey dad I was thoroughly enjoying watching my son scrambling around the ice, crashing and banging into the boards, in pursuit of the puck. That’s until my quiet thoughts were pierced by the angry words of an unpleasant woman standing near me, “I’ve told Tommy, he has to get better grades, or he is not going to go anywhere in life!”

I knew Tommy. He was a good kid. Not going anywhere in life! This lady went on and on, running poor Tommy down. How dare she publicly sentence her own son to such a fate? If she spoke this way publicly, I could only imagine what went on behind closed doors.

Everything in me wanted to interrupt her. To defend her son and every other kid who struggles in school. But I was angry, and I knew that the conversation wouldn’t go well. So, I shook my head, bit my tongue, and moved away.

I didn’t tell her that the high school dropout standing next to her owned the arena she was standing in.


What Goleman saw when he wrote his book in the 1990’s was a faint foreshadowing of the over-emphasis on IQ and academic achievement that exists today. If you have any doubt about how far things have gone, grab a bowl of popcorn and curl up in front of your TV. The new Netflix documentary, “Operation Varsity Blues”, says it all. Relying exclusively on transcripts of FBI wiretaps, the show’s producers leave nothing to debate, or to the imagination. Conversations between Rick Singer, a self-styled college counselor, and his wealthy clients are clear and candid.

Over $25 Million in bribes were paid by movie stars and business moguls to get their kids into prestigious universities like Yale, USC, Stanford, and UCLA. Successful, intelligent parents were convicted of fraud and bribery and sent to jail. All in an effort to get their kids into the “right” school.

To be perfectly clear, I am a huge fan of education and have deep admiration for anyone who has a high IQ and is gifted academically. I wish I was. Goleman’s point, and I agree, is that these qualities alone offer no guarantee of success, financial or otherwise. Knowledge for the sake of knowledge is worthless.

My immigrant clients didn’t need a university education to know that they had to live on less than they earned and save for the future, no matter what. They embraced the idea of short-term sacrifice for long-term gain and knew the difference between needs and wants. These families lived frugally, but well.

Their beautiful vegetable gardens in their backyards were their pride and joy and fed them all. The smell of delicious homemade bread, pasta, and wine—when grapes were in season—filled these homes. Family members worked together in the evenings and on the weekends taking care of their homes and rental properties. Fathers took side-jobs at nights and on weekends when they could.

The real estate clients I drank homemade wine with understood the Six Proven Principles that govern the creation and management of all wealth. They knew they had to:
  1. Save a percentage of all they earned
  2. Control expenses
  3. Make money Multiply
  4. Protect their wealth from loss
  5. Own a home, and
  6. Increase their ability to earn.

They stuck to investments that they understood and could control, their own home and rental properties in their own neighborhood. Assets that would go up in value over time and provide an income for the future. My clients had true Financial Intelligence.

True financial intelligence, or your FQ, is a combination of age-old financial wisdom and knowledge, guided by a healthy dose of emotional intelligence—which is a macro-ability or life compass.

Experts suggest that our IQ’s are relatively stable most of our lives, and that increasing it in any meaningful way for most of us is difficult, if not impossible.

The good news is that no matter who you are, how much education you have, or how challenging your current circumstances may be, you can increase your level of Emotional and Financial Intelligence, over time, with effort.