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The Success of Today: Reinvesting in Your Business

by Dan on October 13, 2011

Many of the articles I write are pretty straight-forward, based on simple concepts designed to show you how I managed to become successful (I honestly don’t mean that arrogantly). And, although I have mentioned it in other articles, I think that this is important enough to dedicate an entire article to it. It’s on perhaps the simplest concept of all: reinvestment. So simple, in fact, that this is going to be one very short post!

One of the tenets of making money is reinvestment, something which was drilled into me by one of the guys I first started networking with as I began to be successful. He told me something very profound, something which stuck with me throughout my business life:

“We are all winners and losers. Sometimes we win, sometimes we lose. I can guarantee you that at some point in the future you will lose. Just two years ago one of my businesses began to lose, badly. Fortunately, I’d saved a lot of my money and was able to operate at a loss for a few months before things finally started to turn around.  A few months before the loss, I’d been to a Porsche garage to see about getting a new 911 Turbo. Man, I was so close to just buying that car and driving off, but I didn’t. I held off because it was either the Porsche or some cash in the business accounts. Looking back at it, had I bought the car I wouldn’t have survived the loss-making period. I’d probably be broke, but i’m not.”

The hard part here is that it’s so difficult to resist the temptation to spend your hard earned money, but the rewards for resisting are great. The aim should always be to reinvest 40% of all profits, which still leaves you with 60% of your profits to play with.

Even though you end up 40% worse off at first, providing you re-invest wisely, you will see an increase in profits and will experience long-term profit increase.

Sincerely,

Dan Little

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