Loe raamatut: «Development of financial intelligence. 8 Key Zones of Growth in Your Financial Capabilities»

Cover designer James Gillray

© Vladimir S. Lavrov, 2018

© James Gillray, cover design, 2018

ISBN 978-5-4493-5050-3

Created with Ridero smart publishing system

Introduction

There are eight main reasons why you can stay in poverty for a long time and deprive yourself of money. And this is not just a low self-esteem or lack of clear financial goals, which is quite obvious and easily eliminated. There are much less obvious, but at the same time, very important underlying causes of your (of course, temporary, as you read this book!) Poverty. They are the key areas for the growth of your financial opportunities!

Before you get acquainted with them, take note of one fact: while you agree to poverty and think that you do not deserve more, someone earns the money intended for you and spends it for their own needs!

Do not you want to put up with poverty?

You do not agree to live in cramped conditions?

Do you think that you deserve more?

Then carefully read this book. It will allow you to understand the peculiarities of thinking of rich and wealthy people, develop your financial intelligence and eliminate the eight main causes of poverty, which are:

• Cause of poverty number 1. Elementary financial illiteracy

• Cause of poverty number 2. Unwillingness to take responsibility for own well-being

• Cause of poverty number 3. Wrong investment of time and money

• Cause of poverty number 4. Hope for a single source of income

• Cause of poverty number 5. The conviction that the spiritual is more important than the material

• Cause of poverty number 6. Misunderstanding the difference between price and value

• Cause of poverty number 7. The propensity to save and reduce costs, instead of increasing the cost of one’s time and increasing incomes

• Cause of poverty number 8. Unwillingness to benefit people

Waving to yourself and accepting poverty, you may find yourself in time in even more constrained conditions. So do not delay the decision of such an important issue as money. You have the opportunity right now to change your financial situation and enter a new level of life. Take advantage of this!

Perhaps in the past you have repeatedly made some efforts to improve life, have stepped on some rake and learned that it is better to reconcile with what is and not try to change anything. But the past does not exist. The past has already passed and there is only the present. And in the present you can change everything, even if in the past you made some mistakes! With today’s thoughts, words and actions, you can correct everything if you want.

From this book you will learn how to do it!

P.S. Initially, the book was written in Russian and only after that it was translated into English. Due to the specific differences between Russian and English, the author could allow minor inaccuracies in the translation. Do not judge strictly, for the English language for the author is not native. If possible, treat indulgently with possible mistakes and wrong words in the text. Remember that only those who do nothing do not make mistakes! Try to understand the essence of what the author wanted to say. Then you will get the most benefit from reading this book.

Cause of poverty number 1. Elementary financial illiteracy

The most common cause of poverty is financial illiteracy and low financial intelligence. A person with a low financial IQ simply does not know how to manage money and does not have the skills to handle them correctly.

The fact is that neither schools, nor universities, do not teach financial literacy. Even in economic faculties there is no such thing as to teach how to manage money. Therefore, everyone should study the science of money independently. But not everyone has enough time and desire for this. In words, all want to be rich and successful. But in reality, to study the science of money in good faith, only a few give themselves work.

Meanwhile, until you understand the laws by which money is distributed in the economy and you do not learn how to manage your money, you will be poor, no matter how much you earn. Surprisingly, even if you start earning a million dollars a month, you will still be poor if you do not learn how to keep what you earn and multiply. Why? Because it all depends not on how much you earn, but on how much you spend! You can earn a million dollars a month, and spend – more than a million, climbing into debt and loans!

Of course, the first thing you need to learn is to earn good money! But this is only the first stage of financial literacy, on which, unfortunately, many people stop and continue to be poor!

However, there is a second stage of financial literacy – the ability to save money and save money, forming capital from them. Anyone who goes to this stage, ceases to be poor. But it does not become rich either, because money is constantly depreciating!

For those who want to grow rich, there is a third stage of financial literacy – the ability to invest time and money in profitable projects and constantly increase capital!

The mechanism of enrichment is very simple: in order to constantly grow rich and live on passive income, you need to postpone a certain amount of money from each earnings and form capital from it; and at the same time, invest part of the money in what will eventually bring even more money (the so-called “assets”) and multiply your capital.

Anyone who understands this mechanism can get out of poverty and begin to grow rich. Even with one dollar you can start to form your capital. But one who does not understand the mechanism of enrichment, can never get rich, no matter how much he earns. Therefore, learn to understand this mechanism. Understand its essence. Understand the basic financial concepts to better understand what is happening to the economy.

The backbone of financial literacy is only 8 key concepts:

– income and expenses

– assets and liabilities

– time and money

– capital and investments

Of course, each concept includes a number of key terms that every financially literate person should know and understand. The most important financial terms are presented below, on the mental map:

If you develop your financial intelligence and increase financial literacy yourself, find and carefully study at least one book for each term. Without a deep understanding of these key terms, it is impossible to start to grow rich consciously!

First, look at how income and expenses are formed. Learn how to increase your income and take control of your expenses. Then sort out what relates to the assets, and what concerns the liabilities. Learn to distinguish them from each other, acquire any assets and get rid of excess liabilities. After that, sort out the nature of time and money. Learn to manage your time and generate cash flow. And at the last stage of your independent financial training, understand how to create capital and what to invest in it. Learn to set clear financial goals, increase capital and invest it in certain profitable assets, getting a good net profit, which is not taxed or subject to minimum taxes!

Continually develop your financial intelligence, increasing your financial literacy and using the knowledge you have gained in practice. Remember that only a financially literate person can become a truly rich person and not lose at the same time such important values as health, freedom, trust and happiness! Honor your financial IQ and you will achieve in this life everything you want!