Invest your business’ profits
Why did you first decide to start your own business? There could be a few reasons: You want to have a major say in what your schedule looks like day in and day out, you want to provide for the people you love or maybe you’re simply passionate about your industry.
One or all of these reasons might hold true for you. But above all else, you started your own company because you want to ensure that one day you create true financial freedom for yourself. You want to be able to do what you want, when you want to, without your life being dictated by the number in your bank account.
You’re on the right track if you’ve launched a sustainable business that’s generating revenue, but how will you keep growing your money? The only reasonable solution is to make solid business investments that allow your company to continue growing, even when you’re not there managing your company’s operations. Here’s how you can make your business’ profits work for you.
Use the power of compounding
One of the most powerful but overlooked tools in the investment world is compounding. When you put your money into an account that offers compound interest, you don’t just earn simple interest on your funds – your interest begins to earn interest as well. For this reason, compounding is one of the most effective ways to grow your wealth. The more money you put into your savings account, the faster your wealth grows. Compounding puts time on your side.
Diversify and automate your interests
Whether you’re running your own company or looking to become a small business investor, diversifying and automating your finances is essential. Diversifying helps you to smartly allocate your assets. Tony recommends creating three buckets for your money: the security bucket, the growth/risk bucket and the dream bucket. Each accounts for different financial needs in your life – the necessities, the major growth and the future payoff – but all are necessary for a well-rounded financial portfolio.
Next, make sure your investments are automated. If you have to manually move money around each week, you’ll probably forget to move it somewhere secure. Work with a financial advisor or independently set up automatic transfers. By ensuring that your money is going to the places where it can work best for you, you’re protecting your financial future to the fullest.
Start investing as soon as possible
Many people feel intimidated by finances if money’s not their specialty. They wait on investing because they’re afraid to make the wrong choice. Investments always come with a certain degree of risk, but there’s no reason to hold off on making your money work for you. The greatest secret to growing your wealth is to start investing today. There are strategies that can help you along the way, but you’ll never begin reaping the rewards of your investments unless you invest them in the first place. Even with a small investment, your money can take off.This allows you to take advantage of the power of compounding and be able to take greater financial risks.
Know best tax practices
When you’re running your own business, it can be tempting to see everything as a gain, but you have to factor in taxes. How much is your business paying in taxes? How can you invest at the right time to avoid getting hit with tax that was avoidable? Hire an accountant that you trust or learn about the tax laws that pertain to your region and business. Do whatever it takes to keep as much money as you possibly can while still paying your taxes correctly. You know that your interest can compound and grow over time, but so can related taxes and fees if you’re not diligent.
There are many challenges that come with running your own business. It’s difficult to not only run a company, but to make a profit doing so. Begin working toward smarter business investments today by creating a money-making machine that generates more funds and will lead you to a brighter financial future.
Make every investment count towards your success
Tony Robbins’ complimentary Seven Forces content series fortifies you with the knowledge necessary to make the most tactical investments.