Broker Check

Financial Literacy vs Financial Intelligence

March 01, 2023

I was recently asked about my views on young women learning the ropes in the world of personal finance and the common “mistakes” young ladies make in this arena.  This seems to be a re-occurring topic in 28 of my 28 years of being a Financial Planner, and it makes me sad this a topic I’m still asked about today.  When I really think about this question, and dive deep into what is driving this phenomenon, I had a thought that I’ve never had before:  One can have financial intelligence without having financial literacy, and hit their financial goals.  Many of my investing ladies may have low financial literacy, but they have an abundance of financial intelligence.


To me, financial literacy is the knowledge of the practical mechanics of how personal finance works.  For example, how a Roth IRA is taxed differently from a Traditional IRA.  Or how a JTWROS registrations has dual ownership versus a TOD registration that has single ownership.  Women tend to miss out on this education because it’s just not talked about with them.  Everyone has someone to blame for this, and believe me I’ve heard it all, but is it okay to have financial intelligence without financial literacy?


When I think about the women investors I’ve worked with in my career, I tend to think generationally.  My depression brides could feed a family on a dollar a day and my WW2 brides could raise four kids on one average salary.  Three generations later, it is mostly women who are “paying the bills” and know how to play the Kohl’s cash game like a boss.    I’ve seen women manage six figure stock portfolios without knowing the difference between a dividend and a capital gain…and “beat the guys” because she didn’t make any emotional trades all year. 


If financial literacy is something you are taught, then what is financial intelligence?  And can you succeed with just one?  I have met men with high financial literacy that have lost all of their retirement savings and I have met women with no financial literacy and retired early.  To me, financial intelligence is the non-technical side of personal finance.  It’s the emotional side of the facts…not really knowing what you are doing but knowing that it just feels right.  It’s the “why” that should drive the “how”.


And what happens when financial intelligence meets financial literacy?  A true powerhouse emerges.  That investor now holds the power of their own financial universe by knowing both the why and the how about their finances.  And in my career, I have found it much easier to teach someone the how than the why of their personal finances.  Both are important to be a financially well-rounded individual, but both are not required to achieve financial freedom.   It’s okay to just have one.  It’s okay to admit that, too.


Enders Wealth Management

37800 Van Dyke Ave, Suite 125

Sterling Heights MI 48312




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