It does not matter how much money you make, it is how much you keep that matters in business and in life. MAWYOTO™ is Money Above What You Owe To Others. If you have 5 million in gross revenue but you pay it all out on expenses and to your creditors you are on a sinking ship. I know because I learned the hard way. I had a business that went through a chapter 11. I was making millions but had too much debt and the ship sunk. It happens. I don’t recommend it, its a very painful process. You don’t have to learn the hard way.
Here’s how to make sure it never happens to you.
Isolate profits in a separate savings account. Do not connect this account to any other accounts so you physically have to go to the bank to put money in or take money out. Pick any percentage but stick to it. Start with 3, 4 or 5% and work your way up until you can isolate 15% or more of your profits on every single sale. Do it first, don’t wait until all the bills are paid to see what is left. That never works.
Once a quarter you do a pay out. If you have debt take 50% of the money in that account and pay off debt, pay 25% to yourself and your investors as a bonus and keep 25% in the account as a reserve. Depending on your amount of debt, you will become debt free before too long.
Once the debt is gone the owner’s share goes to 50% and the other 50% will go to long term cash reserves which will again be divided as you see fit at year end. I recommend building a 6 month reserve and then begin investing into income producing activities like real estate and purchasing other companies.
This requires you to not borrow during the next quarter so be diligent about it. Follow this method and it will change your life. Total financial freedom will be yours. Simple but not easy. It just takes time, discipline and persistence.
To your lifelong prosperity,