Financial Intelligence Mindset

Taking calculated risks is necessary to advance in life! Even getting out of bed is risky! But some people are more risk-averse than others!

A calculated risk is a chance taken after careful estimation of the probable outcome. Risk is a complicated subject, and there are various types, including: 

• Market risk 
• Liquidity risk 
• Credit risk 
• Reinvestment risk
• Operational risks
• Project risks
• Currency risk 
• And much more.

According to the risk-return trade-off formula, invested money can render higher profits only if the investor will accept a higher possibility of losses.

Episode 10 of my podcast is Risk management from an Investing perspective and wealth creation perspective! 

I talk about my story of coming to the UK to study 23 years ago with £10,000, not enough to cover my expenses to paying off that loan in record timing and empowering myself to help my family and others! 

When it comes to business, it is good to have multiple streams of income and spread your investments as diversification reduces risk.  

You can find out more about me through social media profiles or visiting my website www.racmacs.com. 

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Manage your money, or it will control you! Especially in business, you have to monitor and manage your finances to grow your money and build financial strength! 

• Multiple Streams of Income
• Expenses to control
• Invest surplus cash wisely.
• Access to money 

Most finical control Framework's cost of three broad areas

1. Resources Management - efficient and effective development of business resources, be it: Financial, People, equipment, data/IT

1. Design adequacy - a measure of how well a control system performs its functions

1. Operational effectiveness - the capability of a company to deliver products or services to its customers in the most cost-effective and controlled manner, while still ensuring the high quality.

Here are some tips to control your finances

1. Have a Money Conscious Mindset
2. Have a plan to get out of debt
3. Allocate monies to different pots – profit first system
4. Invest for the future – Compound interest
5. Create Multiple Streams of Income

You can find out more about me through social media profiles or visiting my website www.racmacs.com.  

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A good financial plan acts as a wealth creation model and is essential even in times of uncertainty or curve balls!

Financial planning is having a roadmap and a sense of direction for achieving short term and long-term monetary goals - It is incredible useful for individuals, families, Companies, and Government as well as other organisations seeking to forecast their future financial position!

Importantly, financial planning should be a continuous process - as the only thing that constant is change! Hence, last year plan may not be valid for today or tomorrow! 

Having a plan allows you to measure actual progress relative to where you envisioned things to be at the beginning of your financial year and informs decision making to better achieve desirable results! 

An Investment adviser or an Accountant (like myself) is a good place to start to create, review or reforecast your business and personal financial plans! 

Episode 8 of my podcast is all about financial and life planning, mostly from a personal wealth creation perspective - with lots of useful tips and strategies. See links to listen in the comments below.

You can find out more about me through social media profiles or visiting my website www.racmacs.com.  

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Debt is sometimes necessary to get ahead in life and build wealth, but poorly managed can lead to severe financial difficulties!

Let's face it, even when the economy is booming most of us cannot afford to buy a new home, or pay for our dream car or holiday in cash and often a loan or credit card is the only way to fund what we desire!

With most business impacted by the pandemic, resulting in thousands of job losses and many having to shut, it is no surprise to read in the papers that borrowing five times more in 2020.

In most cases, the monies borrowed is not used to buy assets but merely to try and keep business operations and the economy going!

Normally, I advise my clients and friends to only leverage debt to invest in income-generating assets and not to use debt to buy depreciating assets, However, in these unpreceded times, it is no surprise and understandable that many are borrowing monies to try and survive.

However, paying back the debt and managing one credit rating is always the area of challenge, especially after all the money is spent!

In Episode 7 of my podcast, I deep dive into how debt can be used to build wealth, but sometimes the best choice may be avoiding debt altogether!

You can find out more about me through social media profiles or visiting my website www.racmacs.com.  

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Episode 6: The Profit and Loss or P&L as commonly known and how it impacts the other financial statements

Let me start by asking you questions to test your financial intelligence?

Email answers to [email protected] and I will send you a couple of eBooks to help increase your profitability and bank balance for free !

1. How do you know the profitability of your business products or services are on a weekly or monthly basis?

2. Why is it that you can be profitable and still run out of cash?

3.What is your cash burn rate?

This episode is all about - Understanding the profit & loss account

P&L or Income Statement or Statement of Income – all means the same things

I explain how the P&L affect the Balance Sheet and vice versa

I.e. A change in one statement nearly always has an impact on other statements

So, when you are managing the income statement you have to understand the impact on the balance sheet and the cash flow statement.

If you found this podcast informative, please like, share comment or subscribe/ follow my channel.

You can find out more about me through social media profiles or visiting my website www.racmacs.com. 

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Breaking down the cash flow statement and how it all fits together and link with the Balance Sheet – between these two statements Lenders/Investors have great insight into your buisness.

Link to the Business Money Masterclass (Get Free eBook and Register for Online Course)

https://roystoncumberbatch.com/increase-positive-cash-flow

Positive cash flow - More inflows that outflows = a good position for the business

Negative cash flow – more outflows than inflows a bad position for the business

Cash flow statement

·       Cash from Operations – The Cash flow in and cash flow out that is relate to the operations for the business.

·       Cash from Investing (investments made by the owner) - cash from the purchase or sale of investments

·       Cash from Financing – Borrowing bd paying back loans and transaction between the company and shareholders

Free cash flow - Operational cash flow – capex. I.e. Cash flow from operating activities - minus capital expenditure!

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Do you know why the balance sheet is one of the key financial statements that Investors and lenders look at the most?

Most entrepreneurs focus on the income statement/P&L as this show the profit or loss a business in making, but in reality, the balance sheet indicates the financial strength of a company and is the report that investors and bankers spend a considerable time analysing.

Well, this is because the balance sheet shows the financial health of a business at a point in time and by analysing the numbers, investors can determine how well you have been running your affairs up to that particular point in time.

Managing a balance sheet requires a deeper understanding of finance than manging an income statement – primarily as you have to know how changes in the balance sheet impacts the other financial statements and vice versa.   

As complex as this may sound, there are really three main parts.

Assets = Liabilities + Capital/ owners’ equity 

On this 4th Episode of my Podcast, i explain The Balance Sheet and its importance to business health, wealth and investing.

I talk about the key aspects of the balance sheet, keeping it very basic for now but will talk about some of the complexities in the future.

I also plan to cover the other financial statements, asset protection and much more in the upcoming episodes.

You can find out more about me through social media profiles or visiting my website www.racmacs.com. 

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Welcome to my Podcast where I talk about all things related to Money Mindset, Finance, Business

and Investing.

My name is Royston Andrew Cumberbatch – Finance Expert and Business Strategist with 30 years in

finance and business, of which 19 years in financial services.

Episode 3 of my Podcast:

In this episode, I talk about Money - The lifeblood of every business—a Promise in value exchange

and why I consider money to be energy.

I believe that money should not be locked up but allowed to circulate in and around your business -

Cash Flow!

I also talk about the Cycle of Money, how to increase money in your business and why money

management is so crucial.

I tackle the perspective that saying you have money is not precisely accurate - explaining that your

cash has actually circulated and reused tons and tons over - as that is effectively how banking and

financial systems work!

You can find out more about me through social media profiles or visiting my website

www.racmacs.com.

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Welcome to my Podcast where I talk about all things related to Money Mindset, Finance, Business and Investing. My name is Royston Andrew Cumberbatch – Finance Expert and Business Strategist.  

In this 2nd Episode of my Podcast, I explain what is financial intelligence and its importance in enhancing your business performance. I also challenge some of the myths around Money and explain why a financial mindset is necessary to be successful in business 

You can find out more about me through my social media profiles or visiting my website www.racmacs.com. 

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YouTube: https://www.youtube.com/feed/my_videos

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Welcome to my Podcast where I talk about all things related to Money Mindset, Finance, Business and Investing

My younger self used to pray for my circumstances to change, to have the life I deeply desire!

And here is the thing, the journey of my life has thought me that neither your past nor current circumstances determine where you can go - They merely determine where you can start.

My name is Royston Andrew Cumberbatch. 

In this first Episode of my Podcast, I share with you my Journey From Poverty to Prosperity and what it took for me to become a highly experienced qualified account despite all hurdles. 

You can find out more about me through social media profiles or visiting my website www.racmacs.com. 

My Linked Profile: https://www.linkedin.com/in/royston-andrew-cumberbatch-finance.

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