Financial decisions aren't just about dollars and cents. For most people, they're often rife with emotions and preconceived notions. By analysing your attitudes about spending and saving, you may be able to make better financial decisions, according to Baltimore, Md.-based certified public accountant Tope GaniyahFajingbesi. She groups these attitudes into five financial personality types and assigned each one a color to make the concepts easier to understand. Here is a brief synopsis:
* Green: Typical entrepreneur; believes
money should be invested, wants to grow businesses
* Blue: Good employee or financial
manager; keeps budgets, doesn't take financial risks
* Yellow: Embodies the work-hard,
play-hard mentality; emotional spender, buys luxury items to reward him or
herself
* Gray: Generally content, doesn't
aspire for great wealth; the best investor because of patience
* Red: Doesn't handle money in a
realistic way; in debt and without a plan to pay it off
Most individuals are a blend of two of
"money colors," says Fajingbesi. By determining yours, you can
increase your awareness of your strengths and weaknesses, she says in her
recently self-published book 'What Color Is Your Money?' According to
Fajingbesi, being financially self-aware can benefit your business in the
following three ways:
1. Picking a co-founder or business
partner: Bring people on your team who compensate for your financial
weaknesses, says Fajingbesi. If you are a blue person, it may be easy for you
to keep the budget for your business, but not as easy for you to invest large
amounts of money. As an entrepreneur, too much caution can hold back business
growth, she says. If you are aware of your conservative nature, then you might
want to bring on a business partner who will push you to make investments in
your business.
2. Matching your pitch with the
personality of the investor you approach:
If you want to build train tracks in
Africa, you will be best suited to a gray investor because that individual may
not get his or her money back for the next 15 to 20 years, Fajingbesi says.
Similarly, match your own investments with the sort of projects which will suit
your financial temperament. If you yourself are a gray person, you can consider
putting your money to work in community and economic development projects
because the returns on your investment will be small and slow, but also can be
aligned with your personal beliefs, says Fajingbesi.
3. Avoiding dire financial mistakes:
Knowing yourself can also help you
protect yourself from making expected missteps. For example, a green
personality is going to want to invest any money he or she can scrape together
in lieu of saving any. If you know that you are a naturally impulsive green
person, you might develop a routine of running your investment ideas by a
trusted blue colleague before you part with your money, Fajingbesi says.
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