The gambler's fallacy, overconfidence effect and optimism bias are likely even more present in the entrepreneurial community than general population, and with this they face high financial risk. Hi We may wish to view the solution to the world’s problems as love and the pursuit of one’s passion, but as the song says …
Even the most loving, self-sufficient home needs money to cover the needs and wants necessary to survive and prosper. There are many charities struggling to build the bridge between a very worthy cause and enticing donations. Governments fund social issues often less on merit than politics. A business will never survive if they don’t keep feeding the money monster. As another well replicated song has said …
Optimism bias infers that most assume that “everything will work out just fine” and this can lead to a tendency to underestimate negative events that might require emergency funds or savings. Or, it can also mean that people will take higher levels of financial risk than reasonable to gather a higher return as they over inflate the positive outcomes and underestimate the negative repercussions. Similarly, the overconfidence effect can mask competence particularly if the person has lower levels of literacy and mathematical ability (More). Many people want money, but lack the financial competency. Most do not have any plan beyond short term survival and paying off the mortgage, and view the path to achieving financial goals as a bit about hard work, yet ultimately luck or even winning the lotto and other gambling. Hence why gambling such as pokies, racing and sports betting via a handy App is becoming such a major epidemic as the gamblers fallacy skews thinking towards believing that they can beat the odds. Financial literacy is critical and an increasing focus. Teaching entrepreneurship in schools and to other young people is valuable, however, critical within this is financial literacy. Without financial literacy, entrepreneurs are likely to become very good at failing and bankruptcy. THE WORLD’S BEST IDEAS will never get far without money. Survival is very hard in business. The monster needs to be fed constantly with money, and often lots of it to even survive. To scale typically needs even more money, and at times the profit and loss may be ringing alarm bells that the business is failing. It takes money and resilience to conquer. Ensuring that the business has a strong product-market fit is important. A commercially minded business model is also important to map critical aspects of the revenue steams, cost structure, channels et cetera, yet when reality hits the thinking is likely to change, and agility and problem solving comes to the fore. Having a team with high levels of competence and shared values is also vital, yet unless this all helps drive profitability and other financial outcomes the love will likely soon start to fade. A budget with carefully set and monitored income and cost projections is also critical, but even the best planned targets can fall short if the market slows or the unforeseen arises. The gambler's fallacy, overconfidence effect and optimism bias are likely even more present in the entrepreneurial community than general population. That willingness to take risk and a different path and create an enterprise requires innate self confidence and willingness to make a change. As businesses grow, the need for financial competence also grows. Boards place financial governance responsibilities on all directors, not just the treasurer, to ensure solvency, and meeting serious legal requirements. Strong internal and external financial advisors and partners are critical for successful entrepreneurs, yet ultimately the financial responsibility is with individual directors. The answer is likely somewhere between “all you need is love” and “money, that’s what I want.” Love and passion does make it easier to deal with the challenges of life and business, yet being financially savvy is a vital counterbalance to this. Read the full uncensored article on square holes.com/blog Our own research and experience illustrates huge opportunities for financial institutions, government and others to innovate to better help the general population and entrepreneurs to have the tools and financial literacy to prosper. I will leave the final immortal words to Abba …
Thank you, Jason ‘Financial Literacy for All’, a movement towards creating a financially intelligent India. Dr Anil Lamba’s training programs are held internationally, with a client list exceeding 2000 large and medium-sized corporations spread across several countries including India, the USA, and in Europe,the Middle-East and the Far-East. Watch his talk ... Also ... (while we are talking about the importance of money) ... I have been a proud board member of the Patch Theatre Company Board since July 2008. We have been set a critical fund raising target of $25,000 by end of April 2017, as part of the Creative Partnerships Plus1 initiative. If (if) we meet the target, and we are well on the way, Australian Government will match dollar for dollar every donation we receive. If we don't acheive the $25,000 no match. :-( As a Board member, I have been set a critical target, and I would REALLY appreciate any support. Please click here for more / to donate There’s never been a better time to donate and support theatre for young children. Patch Theatre Company has a diverse repertoire of acclaimed, tour-ready productions for 4-8 year olds and their families. The company is based in Adelaide, South
Australia and has presented over 100 new productions to more than 1.6 million children and their families since it began in 1972. Patch Theatre's most recent production of 'Can You Hear Colour?' the new opera for children, launched at the Adelaide Festival was very successful and received RAVE reviews.
Companies such as Patch Theatre punch well above their weight in creativity with a small team and budget, and donations are critical. The amazing shows such as Can You Hear Colour are unconventional and empower our future innovators. Please GIVE $1,000, $500, $100, $50 to help fund critical stuff for little kiddies - the future. Do it! Pretty please. Please click here for more / to donate :-) |