financial intelligence

Financial Intelligence: What you need to know before Investing

As leaders, every aspect of our lives matters. Be it your relationship, education, social life and even the most ignored aspect of our intelligence – financial intelligence. Leadership isn’t limited to being in a position only, but at every level we find ourselves, we are capacitated to exhibit our leadership attributes. However, one limiting factor that can hinder one to fully express themselves is the issue of finance. And the pressure associated with this is that people are always in a hurry to breaking out of their financial bondage, and in the long run, they do not take out time to educate themselves on the journey towards financial breakthrough.

The most common terminology we hear in our quest for financial freedom is the word INVESTMENT, and as simple as it sounds, those who speak of these have failed to caution the newbie’s on what to do and what not to do while considering the path of investing.

Therefore, as it is our custom in leaders digest, this article is written to educate those with little or no knowledge on what to consider before they start any investment.

 

  1. Pay off Prior Dues

No investment can be fully enjoyed without you actually being done paying off your dues and clearing your debt. A clean slate for all your debts is very essential to begin investing stress free and focusing on returns. This keeps your mind at peace and you won’t be under pressure to get your returns before the stipulated time.

  1. Create Cash Emergency Fund

This is one mistake most newbie’s do. It is advisable that before you start investing, you need to have a separate cash fund prepared just in case of emergencies. There is no questioning the volatility of the investment market and you can’t really depend on redeeming from market when in dire need. Therefore, having an emergency fund lets you start your investment journey with a bit more ease.

  1. Create Financial Goals

One of the most important questions often asked is how to invest money and earn quick profits! However, there is much more to investing than just expecting returns. It is equally important to have your financial goals set in place and invests accordingly. Be it buying a dream home, car or saving for retirement, an investment making company will know exactly how to help you get started.

  1. Understand Financial Instruments/tools

There are tons of financial tools in the market which offer numerous benefits. The bigger question often is what you as an investor wish to achieve. Be it quick profit, long term stability, lesser risk or just saving for the future? It’s not tough to make more money with your investments as long as your priorities are already quite clear.

  1. Due Diligence on Investment Options

Asset Management Companies have a variety of financial instruments that an investor can pick from and ensure that they make more money (hahaha… now I’m writing like a stock broker… scrap that….). What I am trying to say is that if you want to know how to invest money wisely then it is best if you do your due diligence on all the financial products available in the financial market and then make an informed decision in line with your financial goals.

  1. Research on market trends

How to invest money wisely is indeed a question every newbie investor should be asking themselves or the investment making company who is helping them build a portfolio. Keeping updated about the market, staying on top of news in the world markets and knowing the current business trends makes it easier for the investors to pick their financial instruments for investment.

  1. Evaluate your risk bearing capacity

Someone once educated me on this risk capacity,  and I got to understand that the same hundred naira Mr A would loss and go about doing his normal activity, if Mr B losses it, he can go into coma for years or even end up dying of heart attack.  The fact that your friend is investing a particular amount isn’t a yardstick for you to do same. His risk bearing capacity could be higher than yours.  Every individual has their own risk bearing capacities. An investment making company will often ask you the risk level your profile fits in as an investor as it helps them decide where and how to invest money and earn quick profits. How to invest money is often a question answered at the expense of how much risk are you willing to take for the same,

As simple and lucrative investing and making quick profit sounds, the truth is that unless you have a foundation in place and thorough research to build up, your investment portfolio won’t be solid.

 

I believe this article educates you on the basis of your journey towards financial freedom.

 

Samuel wrote this also

Photo by rawpixel on Unsplash

Author: Emmanuel Eneojo Samuel

Eneojo Emmanuel, a computer engineer by training, an educationalist with passion and a writer. I find great advantage in travelling, reading and writing. As humans, at some point in life we can get to a cross road and it’s not uncommon for our lives to be unravelled. Hence, my greatest passion is to use my abilities and writings to bring to the consciousness of people that they have a say over their lives and we do not allow circumstances define who we are. I believe there’s a greatness in everyone.

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