How To Save Money As A Business Owner

As a business owner, I face the unique challenge of trying to grow my business, while also saving money aside for wealth. In the past, I’ve had years when my business was not profitable and we were still growing and because of that saving was not an option. But as the business grew I began to realize that I needed to invest in other streams of income as well and that my business was only 1 of many flows that I should be utilizing.

Now before I dive into this topic I want to state something I believe to be the truth: Your business will always be your greatest investment.

Now let them counter that with another truth: The business you are in today, will someday cease to exist.

I want to start with those truths because it really simplifies the process of saving money as a business owner. You need to push the business while you can and while it is growing. You need to pull profit from that business. You need to save those profits for other ventures and other assets.

A myth I’ve fallen into in the past is that a business owner can’t save money. The fact is, a profitable business owner does save money. They want distance from their business. The only way to get distance from the business. This means that at some point you need to have other streams of income that allow you to pull away from the business without draining its cash flow with your living costs and without losing your income.

Another myth I’ve fallen into in the past is that I don’t need to save money, because my business is the best investment. The truth is that your business is your best investment, but only while it’s around. Your business is on a countdown to extinction. Even if you are winning, someday it won’t be there. Anyone who thinks otherwise of this is ignorant or naïve. Do you think your business is stronger than the Roman Empire? How about the British Empire? Those massive groups went out of business. At some point, so will your company. It may be long after you’re dead, but it will still happen.

So let’s put ourselves in the shoes of a business owner. You’re making more money than you’ve made before, and you’re making it fast enough to realize how quickly it goes away. You bring in $10,000 and instantly spend it on payroll or marketing. Or it goes into inventory. You’re afraid to save, but you know you need to. Why? You’re afraid to commit to a savings plan because you aren’t confident in your ability to regenerate the income. You know you need to because you’re also afraid you can’t regenerate the income and all it will take is a few slow weeks before you’re in trouble. So you do nothing and save nothing.

You hear things like “save for a rainy day” and you also hear things like “savers are losers”. You are unsure of what to do and conflicting information isn’t helping you. Even when you do save money, you don’t feel like it is savings because you never know when it might need to go into the next project or the next business expense. So what happens is you end up going through feast or famine conditions each year, and every year. Some weeks you have 5 or 6 figures in your account, and some weeks you feel broke. So again you do nothing.

If you feel this way, I want you to look at the wealth of those around you who are doing the same thing. Is that what you want? I “nice house”, a paid for vehicle, and a moderate income so you can live “comfortably”?

Now I want you to look at the top 1% of wealth and study what they have? Do they have what you want? If so, realize, that they save 40% of their income.

So as a business owner, how do you make it work?

#1: Earn more income. My mentor Steve Spray shared a quote from GC yesterday. “The only line that matters is the top line. Without the top line there is not bottom line. This is the truth. Income cures all. If you’re afraid to commit to a savings plan it is evidence that you don’t earn enough income.

#2: Save anyways. Here’s the deal though, you need to understand your books and your numbers. You don’t save off your gross income. You save off your gross profit. This is your revenue — cost of goods sold. Why? Because this is the real money you actually get to operate with. The gross income goes to cost of goods and isn’t an accurate portrayal of your income.

Off your gross profit, you need to set aside 40% of your income. Can’t afford it? Do it anyways. The reason why is because you will transfer the money to your savings account and realize you are cash flowing and you have money for opportunities. But if you can’t afford it, you will quickly have to transfer some or all of that money into your operating account and experience what it feels like to have to steal your profit because you didn’t earn enough income. It’s happening anyways, you just are acknowledging it.

This savings money should be used to invest back into the business. You may “save” 40% of your income, but you can and may reinvest up to 100% of it back into the business that year to help it grow.

Now, you should also save 40% of what you pay yourself. This money is going to be used to build your personal wealth.

If you can’t afford to do it, the same rule applies. Do it anyways and you’ll ultimately have to end up transferring the money out and use it to pay your bills. You will feel like a loser and go increase your income so that you don’t have to keep doing it.

Saving doesn’t mean that you don’t reinvest the money. It also doesn’t mean that have to. It means you have options.

Now, if you’re saving 40% of your income, don’t make the mistake of giving all of your money to a bank. A bank will loan your money out at a 10:1 ratio per each $1 you deposit and pay you absolutely nothing.

Use the Wealth DynamX Sacred Account.

This account is a properly structured, high early cash value dividend-paying whole life insurance contract. When structured properly this account is 70%-90% liquid, pays a 6–8% dividend with a 4% minimum guarantee, and allows you to leverage your money by borrowing against it so that it grows in up to 6 different ways at the same time. The only other vehicle that can compete with this is real estate. And guess what you’ll use this account for? You’re going to borrow against it to invest in income producing real estate! That’s right!

If you would like to learn more about the Wealth DynamX Sacred Account, click here!

Own Your Potential,

Jerry Fetta

Grant Cardone Certified Coach

Jerry Fetta helps his clients build wealth so that they can eradicate poverty in their own lives and own their potential.

He believes scarcity and abundance cannot co-exist and that the way to end poverty is to help you build wealth.

You were not created to spend 40+ hours per week serving the 40-year-to-life sentence trading your precious time for money just to live in mediocrity.

However, the truth is that time and money must be exchanged. It just doesn’t need to be you making the exchange.

Jerry helps his clients create wealth that exchanges time and money on their behalf. The only way to do this is to make more money, keep it, and then multiply it.

He has helped clients double their income, save $100,000 tax-free, and secure 8–12% fixed annual returns on their assets.

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