The Business Secret Pt 5 – Pay Yourself First
The 5th section from The Business Secret focuses on the simple mantra of pay yourself first.
You may be questioning why? The simple premise is that if you pay yourself first, when others come asking for money; the taxman, your landlord, your staff, your suppliers, it will inspire you to work harder, smarter, it’ll make you innovate and help you wonder what you can do to improve the key numbers to ensure they get paid as well. A strong motivator for all business owners.
If you worry about paying everybody else first, then the motivation may not be as strong if you know you’re going to be ok. If you can’t get quite what you need this month you’ll start using the plastic or dip into the savings. This should not be the way you get rewarded for taking all of the risks.
People tend to spend more or less what they earn. Once you’ve paid yourself, from that money you need to ensure there is enough to save for your Financial Freedom Date.
If you’re 40 now and want to be financially free at 60 or be in a position to be working out of choice rather than necessity, then you only have 240 opportunities to put money away to provide for potentially 480 paydays from age 60 to 100.
You may have a planned business sale that has the potential to kick in a large chunk of what you need, but what if you’re not able to sell? What if the business doesn’t grow as you’d hoped? What if you’re ill and the business becomes worth very little? You need to plan in advance for all these eventualities and putting some money away and taking advantage of the tax advantages that you get as a business owner is key to this.
In The Business Secret we don’t talk about all the tax advantages that you have to pay yourself as a business owner, but we can do that at a later date together. In the book we do talk about the basic principle of saving some of what you earn regularly. The power of saving as much as you can as early as you can, will only make the future more comfortable for you.
The Business Secret is free to download here. Read and look at the tax and business tips we share and act on them to improve your position. Book your no obligation Discovery Meeting at our expense, let us know what you want for your future and how Financial Planning can help you get to where you want to be.
Call 02920 450 143 to book your free no obligation Discovery Meeting