23/06/2020
You may have heard the term financial intelligence or financial I.Q. a few times, but do you know and understand what this means?
Well, the truth is, it is not something that only a few people have, we all possess the ability to manage and use monies to our advantage to a lesser or greater extent, depending on our experience, mindset and risk appetite.
As a Finance and Investment expert, I do not believe in get-rich quick schemes when it comes to business and investing. However, I have certainly come to learn that there is an art and science of dealing with money and how our everyday decisions impact our wealth.
Knowing how to manage your money is something that has begun ever since we started the use of currency for the exchange of goods many centuries ago, around 600 B.C.
With the progress of the eras into modern times, the responsibility when it comes to the use of money has gotten even more complicated. Nevertheless, the prevailing thought when it comes to money is always these generic words" To Spend or Not to Spend or To Save." - The ability to make the right decision based on a desirable outcome is the very core of what is known as Financial Intelligence or Financial I.Q.
Simply put, financial intelligence is predicting the consequence of decisions we make on our business results and personal wealth. It is a bit like playing chess you must know all the possible moves your opponent can make after you move. In the case of financial intelligence, your opponent is profit maximisation and wealth creation.
To put in another example, as not everybody plays and understand chess, a person who wants to buy a meal. He must weigh whether it is worth it to buy a lavish and delicious but expensive meal with small servings or a regular meal that can fill your stomach without costing too much. Naturally, it all depends on whether the occasion is a dinner date or just a simple lunch amongst many factors. The many factors part is the crucial details in deciding when, where and how to spend your money - This is Financial Intelligence at play.
Although Financial Intelligence is present in all of us, however, several people do not use it especially those with the tendency to be a compulsive buyer for things that are not worth the use of the money spent.
So, you can see that Financial Intelligence is indeed essential on a day-to-day basis, but its importance is even more profound when it comes to the Business Setting. When it comes to business, a business owner should always have a sound Financial Intelligence.
Use the link below book a Free Finance Intelligence Training Session to learn how to make your money work better for you..
https://consultationwithroystonacumberbatch.as.me/FinancialIntelligence
So why does having a Good Financial I.Q. play a determining factor in becoming successful in business?
The best thing about financial intelligence is that it is a skill that can be learned and trained. In the business world, it is basically about knowing the ins and outs of a financial situation you and your business faces. Although it has been a concept that has existed since trade and currency has begun, it has only recently gained ground as an essential point when it comes to increasing financial results and lessening employee turnovers by including employees in financial decisions within businesses.
One of the significant advantages of this intelligence is that it increases your wealth via monitoring your cash flow. For business-minded people, knowing your inflow and outflows is of utmost importance - This is one of the reasons why rich people get more wealth - they monitor and manage their cash inflow and outflows.
Once you know your cash outflows; you will see where the money is going and make the decisions to modify the affected area, lessen it or put a stop to it altogether.
Financial Intelligence also affects how you view money and how successful you can be. Knowing that money can be controlled can bring a strong influence on how you use and source funds.
Successful business people control money and know it is not the other way around. They decide where it is going, what it is going into, or who it is going to. Financial Intelligence also plays a part in how we understand how money works or knowing what assets are versus our liabilities. The knowledge in finances draws a fine line between profits and debts.
Perhaps the most crucial role of financial intelligence is knowing what you do with money. Everyone experiences the feeling that we never have enough. The more you earn, the more you buy is quite the tendency.
There is nothing complicated about financial intelligence if you know how to influence the sources and uses of money. A simple example of what many financially intelligent people do is saving a percentage of their earnings automatically and setting it aside as something not to be used unless it provides some form of profit such as emergencies or investments. That percentage is set aside for future investment purposes or long-term gains.
To sum it all up, financial intelligence should always be a factor that defines a business owner. Knowing where and how your money to drive business performance is crucial for business success, whether it is for daily operations or as a long term investment or putting a stop to the use of money that is bringing the business no benefits.
Use the link below book a Free Finance Intelligence Training Session to learn how to make your money work better for you..
https://consultationwithroystonacumberbatch.as.me/FinancialIntelligence
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