Regardless of
how well-versed you are in your profession, talking about finances and budgets
make your head ache. I admit it makes my head ache too, but I achieved
financial success by taking the hard way, that is, self-improvement. Here are a
few things you’ll need to understand about why we fail in finances.
1.
Money
is Objective
Objectivity
is a difficult issue especially if you are an investor of a business you
co-founded with one or many friends. Money has an objective value dictated by
the markets daily, and if you do business with friends, the aspect of money’s
objectivity is thrown out of the window. In any kind of deal, make sure that
the money you get is the money you deserve from your labour, production,
manufacturing, and everything else.
2.
Basic
Terms
When I was in
my 20s, some financial terms were very foreign to me, but I understood their
function very well, so I went for them without any knowledge about the proper terms.
I went bankrupt instantly when I made my first investment. That’s when I
learned that we should know what compound interest, flexible rates mean; you’ll
never really know how they work until you see them in action.
3.
Pre-Existing
Bias
I failed
miserably on the last investment I made because I believed news about things I
believed was going to happen, but never really researched thoroughly on all
sides. This subjective thought made me make a decision I regret. We must
eliminate all pre-existing bias and research thoroughly to avoid making bad,
subjective decisions triggered by a single source that proves our existing bias
to be correct.
