Why financial intelligence is important for businessmen? What are the basic rules, which will help any person to achieve success in the development of financial intelligence? Read the information below to find all answers on these questions.
Financial intelligence for entrepreneurs
The financial intelligence is a method to be smart (to be financially independent or just rich). In the new economy, financial planning begins with the description of a resulting effect. It is important to understand precisely what you want to reach and when you want to reach it. Only then, it is possible to determine a way to the purpose. What to choose: momentary profit or bigger income later? Often we refuse a fair pay in a pursuit of immediate payment. We sell something for the money that we are given today. We can't wait for the real buyer: to whom it is necessary and who is ready to give this price. Often we look for guarantees instead of running a calculated risk. But who can give guarantees? We do everything to defuse tensions around us instead of moving to the purpose. So what is financial intelligence? This is an ability to manage finance, to plan and work according to the plan, to subordinate finance, but not to depend on them, to be able to set the financial purposes and to reach them. This is an ability to see opportunities to earn money, ability to implement opportunities.
The financial intelligence is ability:
- to receive a fair price,
- to count the risks bringing results,
- to move to the purpose,
- to invest the earned money.
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Financial intelligence is not an abstraction, but quite a certain set of skills, experience and the strategy of behavior. You for certain know people, successful in something, but who has problems with money. It can be the talented musician, the athlete, and even the entrepreneur. Why does it happen? The matter is that such people often develop only skills, but neglect development of financial intelligence. And even if they earn much, their money disappear. Possibly, you have a person with the excellent idea demanded by the market. She or he is able to sell and conduct business negotiations. But for some reason, years pass, and she/he doesn't become successful and rich. As an example, we can remember brothers MacDonald's. They thought up the excellent concept, constructed restaurant, and organized business, but didn't become multimillionaires. To deal with a concept better, let’s analyze the strategy of personal finance and look how the developed financial intelligence behaves in life.
- Not to lend. It is very extensive subject with a set of nuances, but in the most general case, it says so: 'Not to lend unless if you wait for the promised money back in full and in due time'. It doesn't mean that it is impossible to give your own money, for example, to relatives. You can formally declare that you lend, but to write off this amount of money forever at once. If he/she gives, it's great; if he/she doesn't give, you will have no reason to spoil the relations with the loved one. As a rule, after several episodes of bitter experience, any well-to-do person learns to get out of this situation.
- Not to take the credits for private consumption. If someone takes the credit for the purchase of the new TV, know that the person has extremely low financial intelligence. Such person isn’t able to count. Any medium-term credit is at least by one and a half times more expensive of the regular purchase. And until such person develops the financial intelligence to a certain level, it is absolutely useless to explain to him that strategy 'I want everything now!' isn't anyhow crossed with strategy 'to become rich'.
- To plan the personal budget. The process of record and the analysis of personal expenditure (and income sources) adjust your mind for the necessary work. Thus, you learn not only to control the expenditure, but also to manage them.
- To earn more than to spend. These obvious tactics, unfortunately, has no wide circulation among inhabitants. Besides, you will be able to find characters who earn less than spend. Such people at first take the loans, then take them again to pay for the first one. Then they quickly borrow money at everyone possible. And it proceeds while creditors don't begin to look for the payback.
- To invest with a difference. When inflow of money is more than outflow, the correct placement of available funds becomes the following step, logical for us. Actually, your entrepreneurial history also begins with an investment of the first cumulative part.
All these simple actions result in understanding that money can be managed over time. If you apply these principles in the personal finance, you are ready to develop the financial intelligence further – to the entrepreneurial level. And there is already more difficult concepts work.
Unit: how to develop financial intelligence?
As we know, only that we train develops. If you just know about the existence of financial intelligence, it won't help you to become rich personally in any way. It is important to use the correct strategy and to learn the mind to make a right choice. The first that can be made in this direction is to apply the principles described some paragraphs above. It will be enough after a while to realize the financial laws not available to debtors and embezzlers. Then you will have first investment opportunities. Communication with finance will become stronger and more noticeable. You will act more surely and receive the better result. By training, you increase your personal financial intelligence. You can also go to some center to improve your skills in this direction.