Monday, December 7, 2009

More than just IQ

Cover of
Everybody knows what IQ is, but that's just one number. People are good at different things, so why is it that we only ever hear about IQ?

Howard Gardner, in his book "Frames of Mind: The Theory of Multiple Intelligences", wrote that there are actually SEVEN different intelligences, and who'd be good in them

* linguistic -- linguists, polygolots, writers, speech-writers, etc.
* Logical-mathematical -- mathematicians, theoretical physicists, philosophers
* musical -- musicians and singers
* bodily-kinesthetic -- athletes
* spatial -- pilots, architects, team-sports athletes etc.
* interpresonal -- salespeople, teachers, etc.
* intra-personal -- this is an exception: this is more about self-worth and self-image. If you have high intra-personal intelligence, you're described as confident, sure of oneself

Mr. Kiyosaki mentioned him in multiple books, esp. "Increase your financial IQ".


In school, you're tested on linguistic and logical-mathematical INT. SAT is the standard test on English and Math. as we all know. However, the other 5 intelligences are barely touched upon. Now with the public education budget slashed again and again, you can forget musical, interpersonal, and intrapersonal INT training for sure. Some schools still have an atheletic department, so they may have bodily-kinesthetic and spatial INT training left, but ony for team members. The rest of you are out of luck.

Some of us managed to discover and develop some of these INTs on our own. Having good parents sure helps, but it's actually NOT essential. Some have natural talent of making friends and/or be mentors. They have great interpersonal skills. Some are supremely confident in themselves. They have intra-personal skills. Those who have musical INT and discovered early on go on and become musicians (though having good looks never hurts... Britney Spears and Cristina Aguilera both were Mickey Mouse Club members long before they had their solo careers). Those with bodily-kinesthetic INT and/or spatial INT went into team sports or the military, as that's where their skills are highly sought. Can you imagine what goes through a quarterback's mind as he calculates ball trajectory while sizing up who to throw to AND dodge defenders? (That's American football for those of you who missed the reference, but feel free to substitute your favorite sport).

However, your parents may push you toward developing certain INTs and careers stressing those INTs, because that is all they knew. The rest of INTs are ignored as unimportant. There's the usual "engineer, doctor, lawyer" career choices, but what if you actually have a talent in other INTs? You won't get to those until college, uniess you have parents that encourages you to try different things instead of shoving you toward what they *think* would lead to you success. And if you have "Blackhawk Parents" (parents who are overprotective, hovers constantly, landing like military helicopters the instant they see any "threat"), you likely won't learn ANYTHING except the two L's (linguistic and logical-mathematical) INTs.

Thus, it is up to YOU to remedy the situation, by discovering your other INTs, and nurture them, so that you become a well-rounded person. Remember, the best investment you can make is invest in yourself, which means acquiring knowledge all the time.

A lot of people lack interpersonal INT. The related skills would be public-speaking, and salesmanship, but it's also a bit about intra-personal, or confidence. Those subjects are simply NOT taught in school. So it is no wonder a lot of people are weak in that area. However, that is needed when it comes to interviews and such. Thus there are all these interview coaches and such, but they don't address the root of the problem: lack of inter- and intra-personal INT training.

Please keep in mind that we are NOT born equal. We all have different "potential". No matter how hard I train, I will never have the bodily-kinesthetic INT of Michael Jordon or Lebron James, the musical INT of Yo-yo Ma or Josh Groban, the spatial INT of a fighter pilot, and so on and so forth. However, we all have the ability to at least TEST our potential, and then try to fulfill them.

Think of it this way: We all start at ZERO. As babies, we really have NO INT at all. However, we have POTENTIAL. When we reach teenager or adulthood, we have been filling up our "potential" for a while. This is when we discover just how big the bottle is, so to speak. I know my limits when it comes to physical activities... I am at most 30% when it comes to bodily-kinesthetics INT potential, and my actual INT in that area is more like 20%. Someone like Lebron James, on the other hand, would probably have potential of 100%, and actual INT of like 90% (he just needs to learn a few more tricks).

Remember the movie Rudy? Where the kid, who's actually NOT that good in American football, wants to play for Notre Dame, a school known for its college football team, and eventually got on the team more for his determination than for his skill? He has little bodily-kinesthetic INT, average or slightly better spatial INT, but he has very good interpersonal INT and great intra-personal INT. He was able to capitalize on the last two for his goal fulfillment.

So what does all this have to do with investing, you ask? Investing involves intra-personal INT and logical-mathematical INT. In other words, the ability to pick the right investment, and to stick with it with confidence. The rest is knowledge. If you lack the logical-mathematical INT, you can't analyze stocks properly. You can't read a company's books or their SEC filings, so you can't understand how it works or how well it is working, so you can't pick the right stock. If you lack intra-personal INT, you lack confidence in yourself, and thus, you'll constantly second-guess yourself, moving money among various investments and go off in different directions, while achieving nothing.

However, keep in mind that any INT can be developed. It is not merely a measure of potential, but also of skill / knowledge. There would be an upper limit for each INT for each of us, but for most people, they will never approach their upper limit in any of their INTs. Thus, most people remain "average".

As Rich Dad (tm) said, "don't be average". Develop your two investment-related INTs, go and acquire the knowledge you need to invest (what Mr. Kiyosaki calls "financial IQ"), and you'll be ready for success.


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