Financial intelligence is a person’s ability to understand the importance of planning and implementing good financial management which ultimately leads him to be able to realize his dreams and hopes. The benchmarks can vary, starting from income level, a person’s ability to set aside his income for investment, to a person’s ability to choose the right investment that provides a large passive income for him.
The higher the income set aside, the higher the level of income, the higher the income he gets from his investments, it can be said that the higher the level of a person’s financial intelligence. If measured from the final results, the higher a person is able to fulfill his standard/lifestyle without having to exchange his time and energy for physical work (passive income), the higher his level of financial intelligence. In fact, that is the end goal of financial intelligence, generating passive income that can fulfill one’s needs and even one’s lifestyle without having to work physically, which is called financial freedom. Wouldn’t it be nice to be able to live life like this?
In the Asian region, Indonesia’s wealth gap is in third place after Thailand and India. In the land of the White Elephant, the richest 1% control almost 70% of the total wealth of the adult population. Meanwhile in India, the richest 1% control half of the total wealth of the adult population. Meanwhile, the richest 1% of people in Japan only control 18% of the total wealth of the adult population. This indicates that the wealth of the population in the Land of the Rising Sun is evenly distributed.
One of the factors that differentiates those who have more wealth than others is their intelligence in managing their finances. The higher a person’s intelligence in managing their finances, the higher the level of financial intelligence, the higher the income obtained through passive income means the higher the person’s potential to be able to have wealth that exceeds that of people in general.
Financial Intelligence Success Levels
The levels of success of the application/practice of financial intelligence are as follows:
Ø Financial protection is a financial condition where we have enough money to meet minimum monthly expenses, for 2 months to 24 months without having to work physically.
Ø Financial security is a financial condition where we have quite a lot of investments that are relatively safe and the results can cover our living needs, house installments, family operational costs (cooking, eating, drinking, electricity, transport and health) without needing to work, except when necessary. choose to work.
Ø Financial independence is a financial condition where we achieve quite a lot of investment which is relatively safe and the results are sufficient for our living needs and a small part of our lifestyle is fulfilled without having to work physically anymore. In other words, we are free not to work but our needs and a small part of our lifestyle are met.
Ø Financial freedom is a financial condition where we achieve quite a lot of investment which is relatively safe and the results are sufficient for our needs to live the lifestyle we want above general standards.
Is financial intelligence more of a talent or an innate trait?
Financial intelligence is not a talent. Financial intelligence can be learned, it can be honed, perfected, sharpened continuously. This means that anyone, as long as they wish, has the opportunity and ability to increase their financial intelligence.
Is financial intelligence solely focused on money/wealth? The answer is no. Financial intelligence does not focus on assets and wealth but actually focuses on people. This means that the person must first organize their thinking/mindset and then the person concerned is able to organize their financial condition.
One thing that can change a person’s mindset and behavior is having a focus and the ultimate goal of life that a person wants. Focusing on a clear goal, high goals and aspirations is one of the keys to a person’s success before he develops himself to become financially intelligent. Examples of goals that are good and appropriate for anyone who wants to build their financial intelligence include:
Want to enjoy an easy old age, have sufficient income without having to work physically and not burden your children and grandchildren and your worship will run smoothly.
Want to be financially free (able to fulfill normal or even excessive living needs without having to work physically or have sufficient passive income).
Become rich (have lots of productive assets) through passive income.
Can help parents and help other people by doing sodaqoh regularly.
Want to make your family happy, give them a fulfilling life and send their children to school even abroad.
Want to perform Umrah at any time/regularly, including after entering retirement age and so on.
The above are examples of clear and quite specific goals that will provide strong motivation for anyone who wants to improve their financial intelligence.
Methods for Studying Financial Intelligence
There is an opinion that states that our current school education system does not teach us to be financially intelligent. There are several school departments that teach financial matters, but actually we study accounting there, learn to do bookkeeping on company assets. We are taught to become reliable accounting/financial personnel for the company or place where we work. Very little or even barely taught how to develop their own/personal assets. At first glance, our school system is still more focused on teaching us to work to earn money, not making money or developing our own money. So are we now too late to learn? Of course not because science/knowledge regarding financial intelligence can be learned at any time and it is never too late. Here are several methods for learning financial intelligence:
1. Learn from your own experience (learning by doing).
Many people are financially intelligent after years of being involved in the real world, they know the joy of passive income, so they continue to try to increase their productive assets to enlarge their pipeline of wealth. Maybe at first accidentally, but once they find the pattern, they become addicted. Of course, not all experiences are sweet. There are those who must first fall and be battered, before finally being able to turn failure into success. Even though they have to have ups and downs first, they are still better off than those who don’t experience it.
Business owners of various companies that have positive cash flow, owners of rental property, owners of cars or other items for rent, may be people who learn financial intelligence from their real daily actions. They transact, sell, buy and deal all the time. Sometimes you lose, that’s normal. As long as the overall cash flow is still positive. They are finally able to compensate for losses in one transaction with profits in other transactions.
They use trial and error, learning by doing, to build their financial intelligence. The plus point is that they can really feel and appreciate the process that is being carried out. The negative, of course, is having to bear very expensive learning costs.
Those here are those who, for one reason or another, choose to do it directly without using direct guidance from other people. Doing it themselves, making mistakes, learning from mistakes, correcting mistakes which ultimately makes them understand what is necessary, can and is good to do and what is not.
2. Learn from mentors.
The mentors conceptually understand the principles of financial intelligence. They already have examples and experiences both from themselves and others. Learning from a mentor, God willing, can reduce the possibility of failure. At least, there is someone you can talk to if you want to maneuver, if you want to sell or develop and buy assets. Some provide instructions based on theory or experience.
But on the other hand, learning directly from a mentor also has negative potential. Learning from this mentor should still not be swallowed completely following the mentor’s theory and experience. Moreover, if the mentor practices some bad ethics in business, such as not being able to maintain relationships, practices that are not in accordance with the guidance of Allah and His Messenger. So you have to be careful when choosing a mentor, choose those who are truly experienced but also do not violate ethics and rules in business and religion.
3. Learn from sources through seminars, training, etc.
We can learn from short courses about financial intelligence. We can take short courses, training or seminars on how to increase financial intelligence and achieve financial freedom in a relatively short time. We can interact directly with the speaker, who may be a famous motivator or expert in the field of knowledge regarding financial intelligence which in this day and age is relatively easy to obtain.
The advantage is, we can have direct dialogue with them, we can absorb their knowledge. We can be infected by his explosive motivation and then be moved to do the exact same thing as suggested by the speaker or motivator. The downside is that the speaker doesn’t focus on us. There were dozens or even hundreds of other seminar participants. The expert will only try to formulate a generic recipe. In fact, implementing various financial strategies must take into account the special characteristics of each person and type of business. So it is not certain that what the speaker spoke so passionately about can be done perfectly.
4. Learn from books and videos.
We can also learn financial intelligence from books and videos. Recently, there have been quite a lot of books and videos circulating both off-line and on-line regarding financial intelligence. The writers and presenters present various recipes, formulas and practical tips, both in simple, practical and easy-to-digest language styles, to academic sentences that are difficult to understand. From descriptions using everyday vocabulary that are easy to understand, to complex formulas and numbers.
Just like taking part in training or seminars on financial intelligence, learning from books also has many disadvantages. The theories and tricks in books are sometimes unrealistic. Especially if it is written by a foreign author, who has experience abroad. Because the world of business and economy in Indonesia has a different style from other countries. The economy is different, the inflation and banking practices are different, and the behavior of the people (consumers) is also clearly very different.
The most important thing for us is how we learn and practice financial intelligence which will actually be very beneficial for our future. Methods can be used from various approaches as stated above, we just have to find which one we can do, find which one is suitable for us. Don’t delay learning it, the earlier you learn the science of financial intelligence, the better it will be for our future.
