CENFIS created the new subject called Financial Intelligence. We patented it and protect it under the Trade Marks Act. The content is summarised in just seven elements.
I will try to give the shortest summary of these seven elements so that you can have a rough idea how they work together to produce sustainable financial success.
1. Motivation and Unlearning
The first criteria for success is to be hungry. We must have a great hunger for success in order to achieve our financial goals.
Most of us have wrong ideas about money handed down to us by our parents, loved ones, friends and society in general. We think like poor people. We need to unlearn and start learning to think like rich people before we can become rich.
2. Residual Income
The whole content of financial intelligence lies in the idea of residual income or passive income which is the more common term. Every other element is tied to this concept of doing work once and getting income many times after that. In fact, that is our definition of financial intelligence.
Why do want to be motivated? To achieve financial success. And that means creating passive income. Without passive income, our income will stop the moment we stop working.
Why do we want to make money? To accumulated capital and invest in something that gives us passive income.
Why do we need to save money and control our spending? To accumulate capital and invest in something that gives us passive income.
Why do we need to invest? CENFIS' definition of investing is to convert the income that we earned into a form of passive income.
Why do we need to practice financial discipline and emotional control? To prevent ourselves from losing money and losing our source of passive income.
Why do we want to protect our wealth and distribute it wisely? We don't want our hard-fought sources of passive income to be wasted or destroyed.
3. Making money
There are two most common ways of making money ie. to be an employee or to become an entrepreneur. Of course, there are a hundred other not-so-common ways to make money and to become rich.
4. Saving and spending
Some people make a lot of money but they don't get ahead in life. That is because they don't save money and control their spending. Some people don't know the technique for saving money. Also, they don't know why they must save money. They see no necessity to invest their money. In fact, investing is the last thing on their mind because they think it's risky.
5. Investing
As mentioned earlier, CENFIS idea of investing is simply to convert the money that we earned either from our job, our business or from other money-making projects, into passive income. For example, to buy a piece of property and collect rental every month.
6. Financial discipline and emotional control
Some people like sports or entertainment celebrities have an extremely high level of discipline when it comes to their field of expertise. But when it comes to money they do not exercise financial discipline.
Everything that we learn about money is useless if we don't put them into practice by practicing financial discipline and emotional control. Among other things, we need to work hard and not be lazy, manage our fear and greed, and impatience.
7. Protecting and distributing wealth
A lot of rich people struggle when it comes to the last leg of their financial journey. They face problems with succession and distribution of their wealth. Mistakes in this area will cause all their hard-work and effort to disappear soon after they pass on; sometimes leaving behind a lot of unhappy loved ones and beneficiaries.
There you are; in a nutshell, that is what the subject of financial intelligence is all about.
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