There are two ways to create wealth – we’ll share both the well-known and the less-known ways with you today.
Click the player to listen on the BIGG Success Show podcast, or read the summary below.
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When we think talk about capital for a business, we usually think about money. One timeless wealth-building secret is to use other people’s money, commonly referred to as OPM.
This week on The BIGG Success Show, we discuss the third of the three Rs of BIGGsuccess – which has to do with your network. The summary is below.
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It’s Back-to-School time and we’re in the middle of a ten-part series on lifelong learning. We started by talking about the 3 R’s from our school days – reading, writing and arithmetic. Now we’re talking about the 3 R’s of BIGG success.
So far we’ve discussed two of them – responsibility and resiliency. Today we’ll chat about the 3rd R of BIGG success – relationships.
Today’s episode is made possible by Linq, digital business cards for modern networking. Make a lasting impression by sharing your contact information, and more — straight to someone’s phone or inbox.
We are living in the age of interdependence. It’s amazing how much can be accomplished by working together.
Relationships have always been important, and now it’s possible for any of us to build a worldwide network of relationships for work and play!
Here’s a concept that business owners often struggle to really understand: Every penny you spend is an investment.
We’re used to seeing investments show up on our Balance Sheet. We buy a new computer and we see it added there.
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When we spend money on advertising or office supplies, it shows up on our Income Statement rather than our Balance Sheet.
But we’re still spending money. It’s an investment for the purpose of increasing our sales.
The financial statement on which it shows up on is based on accounting rules. We have to understand that we are spending the money with the purpose of increasing sales.
While we say business owners, this concept applies to our personal finances as well.
As a business owner, particularly a business owner who owns 100% of your firm, your business finances and personal finances are completely linked.
Not in a legal sense – you’ll want to talk with your attorney to select the right entity for your company – but in a philosophical sense.
Your business has to do well or it will affect your personal finances. We all get that.
What a lot of people forget is that their standard of living may affect their business. If you spend too much personally, you put more of a burden on your business to produce more income for you to take out of the business. It can really add to the pressure, particularly for a start-up business.
In our personal lives, every penny we spend should add to our happiness. If it doesn’t, it’s not a worthwhile expenditure.
There’s a technique that helps you decide if the returns you’re getting are sufficient. It’s called zero-based budgeting.
For every line item on your Income Statement, you assume you don’t need to spend any money. Then you add to it for the outlays you determine will give you the return you desire.
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I do this in my businesses every three years. Costs can creep in. You commit to this service or that program. It all adds up. Instead of doing it all every three years, you may pick a few line items every year for review. Just make sure you cycle through all of them every few years or so.
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Let’s take an example that applies to our businesses and our personal lives – our cell phone. I might ask myself: Do I need the package I currently have or could I cut back? Do I need unlimited texting?
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You’ll also consider alternatives. If you weren’t spending this amount of money on your cell phone, what might you spend it on? You might find you could increase sales faster or be a lot happier if you spent this money on another thing.
You might decide to increase your long-term happiness and invest this newfound money. That may make you happier now and then.
By justifying the expense all over again, away from the emotional point of purchase, you’ll spend your money on what you really want. You’ll get the returns you seek. That’s bigg success.
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Thanks for the gift of your time today. Please join us next time when we ask, “Have you evolved enough?” Until then, here’s to your bigg success!
Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00492-093009.mp3
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BIGG success is life on your own terms. Our focus today is on money, one of the five elements of BIGG success.
Specifically, we want to talk about an asset that is particularly valuable now. Yet it doesn’t show up on your Balance Sheet. It’s your credit rating, or credit score.
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