There is IQ, EQ but what about building your FQ
Building up your FQ or Financial Quotient
The financial quotient can only be built when people start absorbing the basic amount of knowledge to save and multiply their money in hand. Start imbibing the knowledge from now onwards to slowly become rich.
You don’t need to earn profusely in order to save even a person earning less than 3000 dollars which is the average salary per month of a person living in The United States can save and invest smartly to buy and acquire anything which they want.
People hiring investment managers also often tend to lose a large part of their investment money just because of the lack of basic financial knowledge. They are oblivious of the fact that even though after hiring the best financial advisor they are prone to a few risks and these can only be avoided with the power of knowledge.
There is a large population which is completely clueless about how to invest the money for a short time period and they tend to lose a large interest gain. So what is the solution??
Here are a few tips for beginners to start their journey towards building up their FQ or Financial Quotient-
1.) Start keeping a record of your cash flow-
With multiple credit or debit cards and savings account, people tend to lose the track of their spending. Knowing the amount you have and how much you require for your needs will give you a clear idea to plan your needs, wants savings, investment percentage distribution pie chart.
2.) Keep yourself updated -
Having knowledge about different schemes or products for your investment money will open wider horizons and will save you from all the risks involved.
3.) Set your financial goals-
This involves long term and short term solution-oriented planning. Jot down your short term and long term goals and start investing accordingly. Don’t forget to consider the time period if you are planning to go for deposits or long term mutual funds investments.
4.) Be aware of the financial products-
Sometimes we invest in the most common known ways and forgets to compare and analyse the final product of our investment. For example, people usually go for fixed deposits when they have to store their money for some time period but they are unaware of different options available with higher profit gains like investing in a liquid mutual fund which gives 7% interest as compared to any fixed deposit which usually gives up to 4%.
5.) Don’t forget to check the charges-
If you are taking the help of some financial advisor, investing in a mutual fund, opening trading or savings account under a broker etc. don’t forget to check the servicing fee or brokerage charges analyse and compare all the available options and then decide.
Keeping these points in mind will allow you to choose the best option for your goals and will lessen the risks involved. The financial quotient isn’t an innate trait it is an acquired feature which can be enhanced by just keeping yourself aware.
Stay on top of your finances. Don’t leave that up to others.
–Leif Garrett
To sum it up this saying is the best fit. Mismanagement of your finances can bring you back to zero so watch, learn, plan and earn.
