Stay Broke I Say!
Stay broke! You heard me, stay broke but not poor. What is the difference? Broke is a temporary situation. Broke people have money they just misuse it. Poor is being destitute or lacking sufficient resources. I got this from Grant Cardone’s, The Millionaire Booklet. It also aligns with Dave Ramsey’s concept of naming every dollar.
This is about increasing cash flow and wealth building. Staying broke is a financial strategy to help you reach financial freedom. What does staying broke not poor really mean? First, it means having a monthly cashflow plan (budget). Second, you are practicing delayed gratification. Third, reinvesting your money into yourself and your business.
This is for wealth builders. Those entrepreneurs who are not playing average. The average business owner in the United states makes less $25,000 per year. 91% of all small businesses earn less than $250,000 per year and 80% of entrepreneurs are failing within 18 months of start-up. Playing average sucks. So don’t play average.
You see examples of entertainers and athletes who get paid big and a few years later are filing bankruptcy. There is no shortage of stories of athletes or entertainers that have filed bankruptcy or have became broke after a big payday. Top draft picks start buying toys, living lavishly, or make bad business decisions. Entertainers throw big parties, “buy” the bar, and get into debt buying things they can’t afford.
You check out Wikipedia for the statistics of famous people going broke or filing bankruptcy. These are prime examples of people who got big paychecks but did not stay broke. Athletes have a short career. There is a short window for them to produce a huge amount of income. Entertainers have to stay relevant in their industry before the well runs dry. You, as an entrepreneur, have the ability to continue to produce.
Understand that I am not telling you to cramp your current lifestyle. Staying broke requires discipline. It is making sure that you focus 95% of your time building your biggest assets. Which is you and your business. Grow faster by staying on a budget and reinvesting in your business.
People underestimate how long it takes to be successful in generating positive cashflow. They do not prepare for the peaks and valleys that are going to occur. Furthermore they are not ready for the lean times or when a part of their business fails. But staying broke can help you weather the storm that comes.
5.5 Aspects of Staying Broke
1.Cashflow Plan – In order to stay broke you have to know where your money is going. Everyone needs a cashflow plan. Know where every dollar is going. Give every cent an assignment. Money that doesn’t have an assignment tends to get lost. Tracking your dollars keeps you out of financial trouble. Money that hangs around with no purpose gets spent, wasted, or blown.
2. Delayed Gratification – I made this mistake often. I would spend my bonuses and every huge increase. I was naive to think it will always come in. I didn’t save or reinvest into my business. Thus I became broke and homeless. “Ballin” is stupid. Especially when you don’t have the assets to support it. Leave the flashiness behind. Forget impressing people and being “turnt up”.
That big client you just landed doesn’t signal it’s time to spend and get stupid with the new increase. Delay that impulse. Put that money back into your business to create more revenue. Go land some more big clients. Delay indulgence now so you can indulge later when you are financial free.
3. Increase Income – Income is king and this is the only thing that matters. Remember, we are not playing average. Businesses succeed when revenue increases. Incremental increase is key. Going from $4k per month to $4 million over night is nearly impossible. Look to double your income over the next several months. Always look to increase revenue. More sales = success.
4. Sacred Accounts – Put all that extra income into Sacred Accounts. When something is sacred you do not touch it. You don’t violated it. This money is for future use to help create more assets. I have a real estate account which I haven’t touched in years. I put a portion of my income into it every month. All of my extra cash goes into that account and I don’t touch it.
You are saving to invest. Not saving to save. This money is designated to a future purpose to create more income. It could be a second business, real estate, or something else that will increase your income flows. The key is… you are not just saving. You are studying while you are saving and learning about your next investment. Understand it could be years before you pull the trigger. I have saved in my real estate account for 2 years. I am studying and active in the areas I want to invest in. Study while you save.
5. Reinvest Your Profits – A part goes to your sacred accounts. Reinvest the rest after all your necessities are taken care of. Put that the money back into your business and yourself. Need to invest in coaching to get better? Then do it.
5.5 These Things Take Time – Idea + Hard Work x Time + Discipline = Success. Are you committed to getting rich? How serious are you about creating wealth? I don’t know how long it will take you to produce a six figure income. I do know it takes work, time, discipline, and access to capital. My mentor went from welfare to earning $10 million dollars in less than 3 years.
Success takes time. Stay broke and continue to grind. The choice to stay broke is yours. You are voluntarily choosing to build your business so you can be financially free later. “Pay the price now so you can pay the any price later”.-Grant Cardone Article Source: Ezine Article
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Copyright 2016 Charles Fitzgerald Butler