There is a lot of talk about financial intelligence. And in this article, I have made it my mission to study these terms to know their true meaning. We can conclude that it is without a doubt the best gift we can receive as entrepreneurs.
Before I go, I want to separate these two terms and quickly study them separately. And I want to start with the term intelligence. So be patient, it takes a little longer, but we also learn a lot more.
What is intelligence?
If we study the term “intelligence” from its root, we can find many things. I want to leave you as a reference one of the sites that have helped me, although I have analyzed several. I’m talking about this one.
But anyway. We can say that intelligence is closely related to prudence, understanding, understanding, reason, etc. If we study other sources, we can talk about intelligence as a term related to “build”.
In other words, we can say that intelligence is the ability to understand, “to understand something”, to be careful with it, to show reason and not crazy behavior, but this ability needs to be built and is able to do new things to build.
So far everything ok? let’s leave it at that, it will make more sense later. But let’s get to the concept of finance. Don’t get bored or confused. I’m doing this so it’s much easier to explain what financial intelligence is.
What is “finance” or finance?
The term finance is perhaps easier to understand. Everywhere you will find that it is a sector or branch of economy and administration. Identify yourself by studying the exchange of capital. In other words, for studying management and fundraising.
Well, good study and capital management is undoubtedly a success. We can’t deny that a good job of this kind will bring in a lot of money. That is why many are interested in topics such as “financial intelligence”. So what can we summarize from these two words?
What is financial intelligence?
Based on what has already been studied, we can say that financial intelligence is the ability to:
- Understand everything related to finance.
- Understand its true meaning. Because I can understand the following sentence, “True love is eternal,” I can read well, but I don’t understand what it means. It’s not just about understanding formulas, theories, but about understanding how they can help us and how we can put them into practice.
- Be careful with our finances. In other words, knowing what risks we are taking with each expenditure, investment… and acting correctly. If I know that a movement in my finances (buying something, investing, personal spending…) will create more problems than benefits, then why make that movement? Or on the contrary, if not making a move is giving me trouble, why not? We must learn to act taking into account the risks or benefits and not to be carried away by emotions, impulses … This is intelligence in the field of finance!
It’s also important to make it clear that the moves you’re making regarding your finances don’t make you look like a madman in the eyes of professionals who really understand the subject, but rather like a sane person who knows what you are doing.
And what does building have to do with it?
Without forgetting the relationship that this term has with intelligence. We can say that applied to finance makes it very clear that intelligence in finance is something that is built.
It’s not something you say, “I was born with it and there’s no need to train me.” But it’s something that requires your constant work. Because aside from building it, the consequence of applying intelligence to finance is that it builds. what builds successful companies, solid finances, personal success etc.
So if you want to reap the benefits of this kind of intelligence, you have to do something. You have to train yourself. In this term “training” we see two terms that are already being studied today. I think:
And once trained, we see the third semester learned, which is cleverness. That is, I already understand, I understand through training, and now I’m prudent and acting in the safest way based on what I’ve learned.
It’s my opinion and my advice (Other definitions)
You can find more concepts on the Internet. Some clearer, simpler, others more complex and extensive. However, what I have shared with you is my part of my opinion as a result of what is being researched on the subject.
Aside from not contradicting any other accepted concept, it is a clear, simple and direct form, very complete even though summarized. Let’s look at other ways of defining intelligence in finance (somewhat paraphrased):
- A skill that, if developed, will help us find new sources of income… to achieve economic stability.
- It is effectiveness in practice, in terms of finances and money. It’s not just theory, but putting it into practice and being able to see good results.
- It is the part of our intelligence that we can use to solve our finance and money problems.
As you can see it doesn’t come from what we explained. However, I invite you to reflect on the definition we have examined and improve your financial intelligence:
- Understanding (training).
- Understanding (training).
- Be prudent (act based on what you have learned).
Has it become clear?
I hope. But more than comprehension and understanding, I want you to be circumspect and start acting based on what you have learned. So strive every day to become smarter in the financial sector. Educate yourself and act!
Without further ado, I can only say goodbye and wish you every success. A hug! See you next time!
3 topics that will interest you: