From Emotions to Earnings: How Emotional Intelligence Shapes Financial Success

Written by Jen Gao

For the growth-minded, so that emotional insight fuels financial success.

I recently introduced emotional intelligence to my Finance classes. Although I've been teaching Finance for three years, this is my first year incorporating this concept into the curriculum. The change came after reading Robert Kiyosaki's Cashflow Quadrant last year.

This insightful book taught me that "financial IQ is 90 percent emotional IQ and only 10 percent technical information about finance or money." Kiyosaki derived this understanding from Daniel Goleman's Emotional Intelligence, which I'm currently reading.

To understand and develop emotional intelligence, we must first grasp what emotions are and how they differ from feelings and moods. A simple way to define

e-motion is ”energy in motion,”

adapted from the French word émouvoir, which means “to stir up.” Therefore, emotions arise as a chemical reaction to a subjective experience.

Subjective experiences could be events like getting engaged or graduating from school, but people can interpret these situations differently, and that’s where feelings arise. The image below provides a simple visual explanation of the difference between an emotion and a feeling.

Essentially, emotions are felt in the body, and feelings are felt in the mind as interpretations of emotions.

What about moods? If you think back to the last time you were in a good or bad mood, it probably lasted a while. If someone feels happy after getting engaged, they may stay in a good mood for that day or even several days. If someone feels sad after graduation because they’re unsure of their next steps or didn’t have loved ones with them to celebrate, they might stay in a bad mood.

However, it’s usually harder to tell why we’re in the moods we’re in because of their longer-lasting and lower-intensity nature.

This is where emotional intelligence comes in. The more aware we are of our triggers and reactions, the more we can not only acknowledge but also change the emotions, feelings, and moods that don’t serve our well-being.

The more emotionally intelligent we are, the better we can control our fluctuating emotions and keep more of our money.

Like Kiyosaki says, "It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for."

Let us know in the comments how you use emotional intelligence for your finances or any questions you have!