Not only do we need to be intelligent and smart about the way we set and plan financial goals but improving our emotional intelligence could give us the edge to take us over to the ‘success’ quadrant.
What is emotional intelligence?
Emotional Intelligence (EQ) is about how we can better understand, empathise, negotiate and foster meaningful relationships with people.
As quoted by a Harvard theorist:
Your EQ is the level of your ability to understand other people, what motivates them and how to work co-operatively with them.
Having a mature sense of emotional intelligence correlates quite well to attaining financial success when we understand the key attributes of emotional intelligence, defined by experts and researchers in this field.
Key Attributes of Emotional Intelligence
1. Self- Awareness
How well are you in recognising your emotions as they occur?
How self-aware are you of your emotions and their effects upon your decision making skills?
It goes to say, that, if you understand your emotions well, and know how to manage them, it could save you from making costly mistakes.
How often investors make emotional decisions when they are less self-aware and not so confident!!!!
When investment markets are down, and the emotional fear factor grips their intelligence they tend to sell low when markets are down and buy high when markets are up!
Before you act on emotions and go against your investment plans, it’s better to recognise and understand your emotions to better manage one’s own impulsive reactions.
At times like this, check-in with your adviser to get your confidence and awareness back, to stay on-course!
Exercising greater control in times of anxiety, fear or panic can help you to keep on track towards your financial goals. Experts say self-regulation means possessing the following:
· Self–Control – How well can you control ‘disruptive impulses?
· Trustworthiness – How well do you trust yourself and your advisor when it comes to making financial decisions?
· Conscientiousness – How accountable are you of your own decisions?
· Adaptability – How flexible and open-minded are you? The path to financial success is not a straight line. It involves changes and dead ends.
· Innovation – How open are you to new ideas? Your adviser may present different or alternative strategies for your consideration to suit your needs.
To want to achieve anything in life, you need to have a positive mind frame and the motivation to achieve success, whether they are life or financial goals.
To be motivated, researchers define a number of key elements such as:
· Achievement Drive – Constant drive to improve and achieve excellence
· Commitment – You’re in it for the long-haul or until you attain success
· Initiative – Always ready for opportunities.
· Optimism – Keeping positive and pursue success despite knock-backs or negative downturns.
The above attributes are key to achieving financial success because it maybe easy to set goals and have a financial road map strategised for you but it’s meaningless unless you are hungry, passionate, determined and driven to act on the strategy, and get things happening.
Empathy is key when helping others to achieve success, especially for advisers in anticipating, recognising and meeting their client’s needs and financial goals.
You need to know or recognise other people’s emotions and varying depths of fears and comfort zones.
When it comes to making investment or financial decisions, advisors need to be acutely aware of their client’s feelings especially their level of risk tolerance.
Clients need to be comfortable and confident in their financial plan otherwise it’s doomed for zero lift off.
It seems, to do well in life, people not only need their smarts about them but perhaps emotional intelligence can make the difference in driving success and help tip the scales in one’s favour.
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