Financial Intelligence
Money is an emotional subject, where both positive and negative emotions can affect how you conduct your financial activities. True financial intelligence is understanding the flow of money, which side of the cash flow quadrant you currently belong to and which side you aspire to belong to in the future.
As stated above, money is an emotional subject, which means not only do you have to expand the scope of your financial education, but one’s emotional intelligence needs to be developed. Whether this be in the form of reading books, taking courses, or attending seminars and lectures, all forms are great ways to begin your journey of personal development. Part of that personal development must include training yourself do things that you do not want to do, knowing that they are things that you must do. Know what you must do and do it, rather than saying that you do not feel like it.
Important skills to learn and develop are:
Financial Intelligence
Emotional Intelligence
How to restructure debt
How structure an offering
How to raise capital
Understanding your market
Sales
Cash Flow
Do not be financially blind.
Train your mind to see what your eye cannot.
Take small bite size steps in the right direction. “How do I eat an elephant? One bite at a time.”
Cash flow is the most important aspect of financial intelligence. Train the mind to identify the direction of cash flow for everything, assets, and liabilities. For example:
(L) Mortgage <----- Person
(A) Mortgage -----> Bank
(L) Interest on debt <----- Person
(A) Interest on debt -----> Bank
(L) Rent <----- Tenant
(A) Rent -----> Landlord
Every liability you have is an asset to somebody else. An asset is simply something that puts money into your pocket on a weekly or monthly basis. A liability is the direct opposite, something that take money out of your pocket every week or month.
Another form of asset is financial knowledge. This comes with time, experience, and education, so invest in your personal education, make mistakes, read financial statements, and most importantly mind your own business. Create financial statements for every potential asset purchase and use numbers and the bottom line to evaluate the financial sense of a particular asset. This might mean either finding a readymade template or creating your own to determine whether an asset is worth investing in or not.
Financial education it at the top of the rankings in terms of importance. Finacial intelligence solves money problems. Effort and energy expenditure in exchange for money is a waste of time unless you possess financial education and knowledge. Solving money problems makes you smarter and therefore richer. Solve the root causes of the money problem, spending habits, saving habits, investing habits, but most importantly, earning habits. Poverty is caused when problem > solutions, therefore getting practice finding solutions to various money problems will help attain financial education and therefore financial freedom. Understand the laws of money; learn the rules, then play the game. Learn the rule and use them to your advantage. Use them to solve your money problems, current and future.
How can financial intelligence help you?
Daniel Quinn – October 26, 2022