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Financial Intelligence And Its Importance

Financial Intelligence And Its Importance

Post Series: Financial Intelligence

Welcome to the month of Financial Intelligence! I am super excited for all we would be learning together in this awesome month of March. So, let’s get started!

In this article, we would be looking at what financial intelligence is, why it is important, and how you can become financially intelligent.

What is Financial Intelligence?

Financial intelligence is a type of business intelligence constituted of the knowledge and skills gained from understanding finance and accounting principles in the business world and understanding how money is being used. ~Wikipedia

In simple terms, Financial intelligence is your understanding of how money works. This is simply having the knowledge of how to use your money well to generate more money, which includes how money comes and goes out of your income.

Now, why is this important? I mean why can’t we just use money as we please, without being cautious?

This is because 80% of people’s problems are money related and can be solved if the funds are available. So to attain financial freedom, you need to be financially intelligent.

Here are some of the importance of financial intelligence outlined by mydollarbills.

  • Risk-Taking
    Proper knowledge of financial intelligence would encourage risk-taking. Getting excited about winning will improve risk-taking rather than being subjugated by fear of losing.
  • Financial Literacy
    Financial intelligence enables one to acquire financial education. Knowledge of assets and liabilities is fundamental to attaining financial freedom. Financial intelligence helps in wealth growing by encouraging investment in assets rather than liabilities.
  • Understanding Taxes And Business
    The middle class and the poor pay more taxes than the rich. Financial intelligence aid with explicit knowledge on how taxation works and how to pay less by minimizing the tax burden. That doesn’t mean you shouldn’t pay taxes. We wouldn’t have all these beautiful communities if everybody would only look after themselves. But a lot of people don’t know that they pay too many taxes in the first place.
  • Creating Opportunities
    Financial intelligence can help an individual turn a lemon into lemonade. When others see only one solution, financially intelligent people see opportunities and create money out of a bad situation.
  • Work To Learn Not To Earn
    Financial intelligence engenders learning while working rather than working to earn. This approach helps a person seek opportunities to grow in managing cash flow and people which is a needed skill to become successful.

Now that we have highlighted some of the importance of Financial Intelligence, how do you get this knowledge?

  1. Online Articles
    There are a couple of financial blogs that have information on a wide variety of financial topics. You can learn how to draw a working budget, boost your savings, rebuild damaged credit, pay off credit card debt, and choose investments to suit your current status, and this is just scratching the surface.
  2. Books
    There are loads of financial books available, you just have to get them and put to practice all that is learnt. A variety of books ranging from personal finance, getting out of debt, investing, home buying, financial independence, or any other financial topic that interests you. Get them and harness their full potential.
  3. Audio
    Numerous radio shows and podcasts address money matters and answer a lot of questions you might have about money.
  4. Video
    If you prefer visual infotainment, you can choose from a wide range of TV shows and YouTube videos about investing and personal finance.
  5. Classes
    If you would like to learn about any financial topic in more depth, consider taking a class. Many colleges offer courses you can take online for a modest fee or even free. You can find online financial courses on websites like Udemy, Coursera and Future Learn.
  6. Financial Professionals
    Finally, if you really want to get a handle on your personal finances, talk to a financial professional. An accountant can offer financial advice about your taxes, an investment advisor can help you choose investments, and a financial planner can help you get a better grasp of your financial situation as a whole.

In conclusion, here is a very crucial piece of advice from Money Crashers

Improving your financial literacy doesn’t just help you. As you learn more about money, you can use what you learn to teach your children or the younger generation in general. By passing your financial knowledge on to them, you can help the next generation be better prepared to deal with money. Growing up knowing more about money, such as the basics of budgeting, the dangers of debt, and the power of compound interest will make them more ready to navigate the tricky world of modern finance. With luck, when they reach adulthood, they won’t make the same mistakes as many others today.

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