Financial Intelligence
Financial intelligence constitutes the skills and knowledge gained from understanding finance and accounting principles. In simple terms, it means understanding how money works in the corporate world. It may sound like a simple thing, but the truth is that many people are not aware of it and those with the knowledge do not use it to its full advantage. It is important to note that this type of intelligence is a skill to learn, and it allows making mistakes, unlike the formal education system which punishes those who make mistakes.
Research indicates that most people struggle financially due to a lack of financial intelligence. Today the American society is divided into three social classes, namely the rich, the middle class and the poor. The three categories have different views on the subject of cash. The rich are financially literate while those in the middle class and the lower level lack financial intelligence. The rich buy income-generating assets while the middle class acquire liabilities which they think are assets. Study shows that the increased gap between the rich and the poor in American society is due to lack of financial intelligence.
It is also essential to understand the difference between opinions and facts about money (Berman& Knight, 2014). People have different views about money which is dependent on their level of financial knowledge. Differentiating opinions and facts help financially literate people to make an informed decision. Additionally, the formal education taught in our schools does not address the subject of money in any way, which means most people end up in their careers with zero financial knowledge.
There is a need to educate people about the power of financial intelligence as it is the only way to reduce the gap between the rich and the poor. Financial knowledge is an essential skill for anyone aspiring to lead a financially stable life. Of course, many individual dreams of becoming financially stable but only those who have acquired the knowledge achieve their goal. For economically literate people, cash flow is the most important thing to know. Whether you are the business owner or not, there is a need to understand how money flows. The main reason the rich continue getting more productive is that they keep track of where their money is going and control it. Their primary focus is building a substantial asset column.
Financially intelligent people clearly understand any financial step meant today will affect their tomorrow; hence the need to make an informed decision. Today we are living in a world of uncertainties; thus, adequate financial knowledge is an essential skill for anyone aspiring to become rich. Lastly, a big part of business education involves being accountable for your own mistakes with money, which means accepting your own mistakes and doing something about them.
In conclusion, many tools can help us improve our financial knowledge, which includes books, journals, and the article written by financial intelligence experts. Additionally, many colleges are offering financial literacy courses across the world, where people can enrol and learn. Attending seminars on financial intelligence can also elevate our knowledge on the money. Lastly; it is also advisable to listen to a radio talk show that provides reliable financial advice.