6 Instrumental Financial Literacy Pointers That Promote Effective Decisions

Written by
Brent Mack

Are savvy investors born or made? That depends upon who you ask. The bottom line is that financial literacy will always be defined as “the possession of the set of skills and knowledge that allows an individual to make informed, effective financial resource decisions.”

For many successful investors, those skills aren’t necessarily learned in school. In fact, they’re baked into personalities and are evident once a mindful person decides to make investments, especially if those investments happen to be a business start-up.

A surprising number of personal traits already ingrained in one’s character can be the secret to your success. In particular, there are 6 traits you may already possess that can help you achieve your financial goals and dreams.

  1. Are you a disciplined person?

“Forbes” contributor Jennifer Cohen cites a 2013 study conducted by Wilhelm Hoffman that proved people with discipline are not only happier but more adroit at dealing with goal conflicts. The ability to rationally decide when a deal that can alter your financial situation makes sense or not can provide you with the wisdom to say no when something about a dealer tells you that your business can’t take a hit. Self-discipline is the greatest deterrent against impulsive spending and a personality trait to take pride in.

  1. Are you organized?

Simple actions like making sure bills are paid on time and bank accounts are not overdrawn are indicators of an organized person who likes the idea of controlling his finances so there are no surprises lurking down the road. Tight budgets especially require mindfulness and dedication as one builds savings, retirement and investment plans that ensure financial stability. The organisation can not only impact your financial health but also affect your physical health. Financial stress is a leading cause of depression, ulcers and heart disease around the world because so much is on the line for folks who invest.

  1. How confident are you?

For investors struggling with confidence issues, market fluctuations are enough to trigger impulsive behaviour. Not only can they take a timid investment posture, but there’s a chance it could lead to less profit-taking due as a result of dumping investments out of fear or putting assets into bond or cash funds that have no chance of keeping up with inflation. “As humans, we are hardwired to allow fear into our decision making,” writes Gary Korisko for the website AddictedtoSuccess.com. You don’t have to have all the confidence in the world to be successful, but without some, success can be harder to achieve.

  1. Do you think critically?

At first blush, this question may seem illogical but think about the possibility that you could encounter a smooth-talking investment professional or stumble onto an investment deal that seems too good to be true in cyberspace. Do you possess the critical thinking tools it takes to discern a scam from the real thing? Janis Moore Campbell, Temple University Fox School of Business director, says that scammers are equal opportunity offenders and critical thinking skills are critical if you are to avoid bad investments.

  1. Are you willing to try contemporary solutions to financing?

Old school investment and funding solutions may still be around, but effective financial decision-making also demands consideration of new ways of building your financial future. For example, debtor finance has become one of the hottest tools in today’s international market for achieving success. Also known as invoice finance or factoring, this innovative line of credit secured by outstanding accounts receivable can help you and your business grow steadily without worrying about real estate security, other financial borrowings or capital repayment requirements.

  1. How important is accountability to you?

Some financial professionals insist that accountability should appear at the top of this list because it’s so critical when defining personal financial success. Without it, you may go through life without taking responsibility for your successes and failures. This is a long and twisting tunnel without a light at the end. Personal financial choices can be painful if you’re proven wrong, but being accountable for them is the first healthy step toward moving forward knowing you won’t repeat that mistake.

Are these 6 traits the only way to ensure your future financial success? They’re the major ones, as often cited by financial experts who point to millionaires as examples of how to turn personal character traits into assets when making the critical decisions that must be undertaken to achieve your definition of success. If you possess these 6 attributes, you may already have realized this on your path to becoming an effective financial decision maker.

Article Categories:
Finance

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