Top Priority: Do you want to know how to always have money to invest?

Lately, so many opportunities have been coming up for us. A beautiful piece of land on the waterfront showed up on the market. I usually stay away from raw land because it does not cash flow since there is no home to rent out. But whatever, I looked at my accounts and realized that I am able to come up with the cash to put a down payment on this beautiful property.

Since I’ve been applying the lessons I’ve learned from the book Profit First by Mike Michalowicz, I am always putting away funds for a down payment. To put succinctly, the book reversed the common accounting equation:

Income-Expenses = Profit

to

Income-Profit=Expenses

You take your profit first and fit all of your expenses within the remaining funds. Of course the book teaches you in detail how much profit to take out when you start because you do not want your business to starve. Without going through too much detail, it emphasizes the known saying of pay yourself first. No matter how big or small your incoming cash is, take a percentage of it and allocate it for your investments. Start small, perhaps 1-3% and increase it gradually every quarter. Put it in a separate high yield savings account that is quite hard to access so you think twice before you touch it.

I think this is why some people always have money to invest, we make it a priority. It is a necessary allocation in our budgets. Most people do not have money to invest because at the end of every month, everything is spent. Try and look at your operating expenses (household and business), are there things you can cut back on and instead allocate to investments?

To your wealth!

Jolie

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