Stay broke! You heard me, stay broke but not poor. What is the difference? Bankruptcy is a temporary situation. Broke people have money, they just waste it. Poor is being destitute or lacking sufficient resources. I got this from Grant Cardone’s, The millionaire brochure. It also aligns with Dave Ramsey’s concept of naming each dollar.
It’s about increasing cash flow and wealth creation. Staying bankrupt is a financial strategy to help you achieve financial freedom. What does it really mean to stay broke and not be poor? First, it means having a monthly cash flow plan (budget). Second, you are practicing delayed gratification. Third, reinvest your money in yourself and your business.
This is for wealth builders. Those entrepreneurs who are not playing average. The average business owner in the United States earns less than $25,000 per year. 91% of all small businesses earn less than $250,000 per year and 80% of entrepreneurs fail within 18 months of starting. Playing average sucks. So don’t play average.
You see examples of artists and athletes who get paid a lot and a few years later go bankrupt. There is no shortage of stories of athletes or artists who have declared bankruptcy or gone bankrupt after a big payday. The best picks start buying toys, living lavishly, or making poor business decisions. The artists throw big parties, “buy” the bar, and get into debt buying things they can’t afford.
You look at Wikipedia for statistics on famous people who go bankrupt or go bankrupt. These are great examples of people who got big paychecks but didn’t break the bank. Athletes have a short race. There is a short window for them to produce a large amount of income. Artists need to stay relevant in their industry before the well runs dry. You, as an entrepreneur, have the ability to continue producing.
Understand that I am not telling you to limit your current lifestyle. Staying broke requires discipline. It’s making sure you spend 95% of your time building your greatest assets. What are you and your business. Grow faster by staying on budget and reinvesting in your business.
People underestimate the time it takes to be successful in generating positive cash flow. They don’t prepare for the peaks and valleys that are going to occur. Also, they are not prepared for hard times or when a part of their business fails. But staying broke can help you weather the coming storm.
5.5 Aspects of staying bankrupt
1.Cash flow plan – To stay bankrupt, you need to know where your money is going. Everyone needs a cash flow plan. Know where every dollar goes. Give each allotment a hundred years. Money that has no allocation tends to be lost. Tracking your dollars keeps you out of financial trouble. Money that is sitting around for no purpose is spent, wasted, or wasted.
2. Delayed gratification – I made this mistake often. I would spend my bonuses and every big raise. I was naive to think that I would always enter. I did not save or reinvest in my business. So I was left broke and homeless. “Ballin” is stupid. Especially when you don’t have the assets to back it up. Leave the ostentation behind. Forget impressing people and being “showed up.”
That big client you just got doesn’t indicate it’s time to spend and get stupid with the new raise. Delay that impulse. Put that money back into your business to generate more income. Go get some bigger clients. Delay the indulgence now so you can enjoy it later when you are financially free.
3.Increase income – Income is king and this is the only thing that matters. Remember, we are not playing average. Businesses are successful when revenues increase. Incremental increase is key. Going from $4k per month to $4 million overnight is next to impossible. Look to double your income in the coming months. Always seek to increase income. More sales = success.
4. Sacred Beads – Put all that extra income into Sacred Accounts. When something is sacred you don’t touch it. You don’t violate it. This money is for future use to help create more assets. I have a real estate account that I haven’t touched in years. I put a part of my income into it every month. All my extra money goes into that account and I don’t touch it.
You are saving to invest. Don’t save to save. This money is designated for a future purpose to create more income. It could be a second business, real estate, or something else that increases your income streams. The key is… you’re not just saving. You are studying while you save and learn about your next investment.
He understands that it may be years before he pulls the trigger. I have saved in my real estate account for 2 years. I am studying and active in the areas in which I want to invest. Study while you save.
5. Reinvest your earnings – Apart goes to your sacred accounts. Reinvest the rest after all your needs are covered. Put that money back into your business and yourself. Do you need to invest in coaching to improve? Then do it.
5.5 These things take time – Idea + Hard Work x Time + Discipline = Success. Are you committed to getting rich? How serious are you about building wealth? I don’t know how long it will take you to produce a six figure income. I know it takes work, time, discipline and access to capital. My mentor went from welfare to earning $10 million in less than 3 years.
Success takes time. Stay broke and keep working. The choice to stay broke is yours. You are voluntarily choosing to build your business so that you can be financially free later on. “Pay the price now so you can pay any price later” – Grant Cardone