What you want to think about is that every time you want to buy something, how much revenue do you have to cover for the purchases you have to spend? We can’t just spend unlimited money when we have limited sources. 

As business people, spending money is inevitable when we see money coming in but do not consider other expenditures such as bills, taxes, payrolls, and labor that we have to take care of before taking home the total revenue.

Today's episode is about sharing how I use the 20% rule before making any abrupt decision on spending money, whether it is necessary or not.

 

"You start dreaming about maybe toys you want to buy, and I've had this obsession for three years. I want to get an RV or one of those luxury campers I could tow behind my truck. So I go with my family to the beach. And like I'm having visions of what it's going to be like, and then you meet people who got campers and RVs. And at least an RV. Some of them like it's a nightmare. It's a money pit."

- Keith Kalfas

 

 

Why you have to listen to today's episode

1:51 - In the early stages of growing a business, we are bound to dream about buying something for ourselves. It is very tempting to spend those profits on things we really wanted before we had income. And, it’s a money pit.

2:30 - The 20% Rule is so powerful that it needs to be considered before making a purchasing decision.

5:20 - Ensure that your finances are in order and work with an accountant to set up your PNL statement properly. Once you've done so, consider investing.

 

Key Takeaways

"This is powerful. This is a thing that stopped me from making purchases and thinking more about investments, right? I've invested in things after only considering this rule. And I'm just really fascinated and looking at the way how money works." - Keith Kalfas.

 

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Resources/People Mentioned:

Dan Platta Bookeping Finacial Genius: 3 Business financial tips from Dan Platta - YouTube

My Website: Official Site Keith Kalfas

My Blog: The Blog of Keith Kalfas

My Resources: Resources (keithkalfas.com)

Get My Landscaping Business Startup Course: How to Start a Landscaping Business RIGHT NOW (keithkalfas.com)

Get My Free PDF Download The "7 Steps To Marketing Your Business" 7 Steps to Marketing Your Business Online (keithkalfas.com)