Yes, I’m still an InvestorGeek! It might seem like only Jason and Christian are blogging lately, but I don’t mind being the guest that drops in once in a while. I’m sure many of you have watched or heard of the new Mark Burnett-produced game show called “Are You Smarter Than A 5th Grader“. If not, you can read a quick description here.

I was inspired after reading Canadian blogger, Tony Hung’s short diatribe on who’s really smarter – the kids or the adults? Tony, if you don’t know, is an editor at the prominent new media site, BlogHerald. I’ve had the privilege to meet him, and trust me, he’s one smart dude! But I digressed since the question remains, who ARE the smart ones? What does it mean to be smart? Is it just about random trivia or knowledge? After all, adults were able to create a show like that to make money! Aha…. now that money comes into play, that’s my lame segway to discussing financial smarts!


So, What Makes You Smart?
Sure, trivial knowledge can sometimes make you a millionaire… rarely. Ken Jennings was $2.52 million richer after inspiring the millions of the easy money / instant gratification generation with 74 consecutive wins on the ‘Jeopardy!’ game show. But is that what being smart is all about? Is the proficiency at regurgitating facts and information enough to call someone smart? I’ve previously written on Investorial that being successful in financial matters is not predicated on whether or not you have the knowledge. But it absolutely matters to be financially smart! What do I mean?

I humbly define “Smarts” to be a keen sense of awareness; and not just an awareness of facts. Alongside knowledge must come awareness of self, and a highly developed thought processes influenced by many factors – your life experience, your parents (a gimmick that Robert Kiyosaki exploited very well), your cultural influences and even your moral belief system.

Perhaps because of my Chinese ethnicity and the stereotypes attributed to me, I often rebel at the thought that you go to school for knowledge. It’s not that I don’t like those compliments of being a genius or math wiz, but going to school is not about learning 1 + 1 = 2! True awareness is achieved when you have a process in place that tells you how to find the answer should you not know what 1 + 1 equals. Whether it’s leveraging someone else’s know-how, or knowing how to look up the answer. Knowing the answer qualifies as knowledgeable, knowing how to achieve the same result without knowing the answer is displaying smarts and ingenuity! Truthfully, there are some “slackers” I admire more than geniuses. They are not working hard, but they are working smart!

Nobody is going to learn everything they need from textbooks. In fact, most people have not been thought how to manage their finances through any form of formal training. But even if you obtain knowledge, will it truly help? Knowledge that smoking causes cancer doesn’t deter smokers from taking a puff, so why would knowledge help a spendrift become frugal? How is it that someone is labeled “cheap”? Why do people have gambling problems? Why are some people so afraid of the stock market when people keeping telling them how to manage risk? These are personality traits deep rooted in your financial biography. There are certainly ways to overcome tendencies, but its usually through an epiphany, an awareness, a self-realization, rather than the consequence of gaining knowledge.

How Financially Smart Is A 5th Grader?
Does a 5th grader need to bother with finances? Even if they are taught the knowledge, they will lose it during their growth into adulthood. They might remember for one or two years, but it will be a vague memory when they truly need those information. The cramming /memorizing of knowledge is not learning! There is nothing at stake for the kids. They won’t be able to apply those strategies in their life. Those strategies are not being self-actualized into their being because there’s no application or relevancy to do so. Most kids cannot relate when you scold them about wasting money. Again, knowledge does not equate to smarts because the awareness was never achieved.

If that’s the excuse of a 5th grader, what’s the excuse for an adult who keeps falling into debt and having to declare bankruptcies throughout their life? If you’ve got a friend that falls into that category, I’m sure he/she has been told many times the different ways to get out of debt. Maybe he/she even called Suze Orman and got a tongue lashing from her about the subject too. So much knowledge is imparted but it doesn’t mean a thing if it doesn’t integrate with your thought processes. Contrast that to someone who is not knowledgeable, never got advice from any sources but simply has the will to stop splurging on meaningless items. Does being financially smart resonate with being critical to your financial life yet?

The next time you watch the game show. Give the contestants a break! Kids and adults can both be knowledgeable and/or smart in their own way. The truly smart thing to do is not to compare and work on yourself!

Next Time: Business / Career Smarts
If we are discussing your financial smarts, invariably we will need to touch on business / career smarts. Your finance is derivative of your income, which is sourced from your business / career, right? At least if you weren’t born with a silver spoon, there will be a phase in your life where this is relevant. I will actually leave this topic for a future blog post, so watch for it!