Over eight years ago I made a pivotal decision that transformed my business. Two years from a being eaten alive by the vultures. Everyone sucked the money out of my business. I bought things because I thought I needed them. I was undisciplined in my business spending. In order salvage the life of my business, I poured my personal savings into the business.
The result of the reckless abandon was a corpse that had been striped to the bone. It was soul crushing. I had racked up enormous credit card debt on multiple credit cards. My personal savings were depleted.
The only “source” of income I had was my business. As I pondered my reality, I realized that my business had become a money pit.
I thought further about the state of my affairs. I breathed in and out. I grimaced as the shambles that surrounded me.
I had always been resourceful so I sat in silence wondering what I needed to change to change my future. I was acutely aware that my current condition was the result of my undisciplined reckless approach to my business. I hung my hat on a few stars that never took off. Those stars dropped into oblivion.
I bit down hard on the bitter pill that I had to change in order for my business to change. I looked at my previous successes and asked a pointed question.
What did I do to achieve that success?
As I waited and waited and waited for an answer, I listened. Finally the light bulb glimmered and then grew until it shown blinded me with simplicity.
Pay Yourself First – A Part of all I earn is mine to keep.
These are the words I had read many years ago from The Richest Man In Babylon. When I first finished that book, I realized George C. Clauson taught me all I ever needed to learn about money.
I knew instantly that the reason for my business failure to that point was had not listed to The Richest Man in Babylon. I had not heeded his words. It was really silly and short sighted of me. When I heeded the Richest Man In Babylon’s words so many years ago I had gained control over my money.
I was the master of my money.
The reason why I was failing is because I was not paying myself first.
That very day I went to my bank and stared my Pay Yourself First campaign.
Up until that point, I only had one business bank account. Money came in and money went out. At the end of the money I had more month. Thinking about that now makes me want to regurgitate a lung.
I opened a new bank account that I called my Damon bank account. I renamed my old bank account my Operating bank account. This was going to be the key to myself changing the money side of my business and my life.
Every time I got paid by a customer I deposited the income into my operating bank account. Right after I made the bank deposited I transferred ten percent of the income to my Damon account. I lived by this practice religiously.
Now many years later I’m amazed at how a simple action like setting up a separate bank account would transform my business and transform my life.
- My business stop bleeding.
- I started to build up cash reserves.
- I stopped overspending money.
- My anxiety over lack of money dissipated.
Every time I was put I came to a buying decision for my business, I looked at my Operating Bank account. If I had enough money and the purchase made business sense, I completed the purchase.
Here’s the amazing thing, when I didn’t have the money in my Operating bank account, I made a grownup decision and saved the money up or decided to go without.
Occasionally, I would look over at my Damon bank account. A big toothy grin would light up my face. That’s my money. The business doesn’t get to spend that money. The Damon bank account is my blood sweat and tears that I’ve poured into my business.
I grew a backbone. I shouted back at the devil on my shoulder, “Oh no you don’t, you don’t get to spend that money. That belongs to me.”
Now many years later, a tear slides down my cheek as I see the impact that simple decision had on my business on my life. My life was forever changed because I listed to The Richest Man In Babylon. I heeded his words.
I jumped on the path of Paying Myself First.
Let me share with you a little bit of the journey I’ve experienced.
- Four years after I started paying myself first I arrived at My Ideal Money Life™.
- When my wife announced to me that she was expecting our third child we had the funds to upgrade our home.
- I bought an office building for my business, so I could pay for an asset that belonged to me instead of paying for an asset that belonged to my landlord.
- When I got sick, I had the funds to hire a skilled healer.
- When my wife announced to me that she was expecting our fourth child, we had the funds.
- I’ve begun to build the nest egg that will support me when I choose to stop working
I righted the ship that was on its way to the iceberg that would vanquish it to Davey Jones Locker.
I share this story with you because I knew the power of using one bank account to safeguard money.
To learn how to set up your Profit First for Realtors bank accounts see my blog post here.