Economics and finance. The two are related, though perhaps not quite so closely as one might assume. For entrepreneurs, the nuts and bolts of financial reality are incredibly important. After all, how can you keep your business running without accurately tracking and balancing what’s coming in and what’s going out? Finance is what keeps the doors open.
So, what does broad, macro-level economics have to do with any of that? Ray Dalio is a hedge fund manager who has spent his incredibly successful career investing in a wide array of businesses, even in trying economic times. He put together a video — which you can watch below — explaining some of the most important basic economic theories that explain and predict business cycles.
Understanding why, how, and when the economic climate changes can make all the difference in whether a business succeeds or fails. Economic disruptions at the national or even global level are, to an extent, predictable. Being able to see an economic downturn on the horizon and plan for it can be a complete game-changer for you and your business.
With the current state of inflation, interest rates, and the national debt, understanding economics is just as vital to entrepreneurs as understanding finance.
