Comments on: Not feeling so hot, but at least there is some money in the bank http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank Debt Kid - I'm Getting Out of Debt Sat, 21 Nov 2009 02:42:10 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: justme (or imho) http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank/comment-page-1#comment-9477 justme (or imho) Wed, 07 May 2008 02:20:26 +0000 http://www.debtkid.com/?p=436#comment-9477 Congrats on your success! You might consider the following: 1. Save 50% of the excess until you have 3-6 month of IRS and other debt service payments. The theory is that if you have a revenue problem one month you can (unfortunately) limit your labor costs quickly, but you still must have cash to service the IRS payments and others - you cant change those. 2. Invest the other 50% back in the business 3. Set a goal to give yourself a raise. Perhaps once you have saved 3 months of debt service payments you give yourself a 3% raise, when you have saved a total of 6 months of debt service you give yourself another 3% raise. 4. Once you have done items 1 and 3, and you are NOT dipping into the savings for anything, invest 50% of the excess back in the business and save 40% for future business investment and save 10% for a bonus pool for yourself. You pay yourself a bonus when you reach certain business goals. Then you can use the bonus money to personally reward yourself. I used to spend 25% of my bonus money and save 75% of it. Congrats on your success!
You might consider the following:
1. Save 50% of the excess until you have 3-6 month of IRS and other debt service payments. The theory is that if you have a revenue problem one month you can (unfortunately) limit your labor costs quickly, but you still must have cash to service the IRS payments and others – you cant change those.
2. Invest the other 50% back in the business
3. Set a goal to give yourself a raise. Perhaps once you have saved 3 months of debt service payments you give yourself a 3% raise, when you have saved a total of 6 months of debt service you give yourself another 3% raise.
4. Once you have done items 1 and 3, and you are NOT dipping into the savings for anything, invest 50% of the excess back in the business and save 40% for future business investment and save 10% for a bonus pool for yourself. You pay yourself a bonus when you reach certain business goals. Then you can use the bonus money to personally reward yourself. I used to spend 25% of my bonus money and save 75% of it.

]]> By: debt kid http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank/comment-page-1#comment-9475 debt kid Wed, 07 May 2008 00:27:22 +0000 http://www.debtkid.com/?p=436#comment-9475 @ no debt plan @ zintradi - I think that's a great suggestion. I have a business savings account at ING that I should activate again. That way I can build up a savings account and reinvest....the best of both worlds. @ no debt plan @ zintradi – I think that’s a great suggestion. I have a business savings account at ING that I should activate again. That way I can build up a savings account and reinvest….the best of both worlds.

]]> By: No Debt Plan http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank/comment-page-1#comment-9472 No Debt Plan Tue, 06 May 2008 23:44:35 +0000 http://www.debtkid.com/?p=436#comment-9472 Why not do a little bit of both? 20% savings, 80% reinvestment? Why not do a little bit of both? 20% savings, 80% reinvestment?

]]> By: debt kid http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank/comment-page-1#comment-9470 debt kid Tue, 06 May 2008 23:05:38 +0000 http://www.debtkid.com/?p=436#comment-9470 @ Shel - Thanks, yep getting close to the 20 number! @ Camila - I have a number of different things that contribute to my revenue each month, but the main one I refer to hear is my Alpha project, and it's commercial/business software related. For obvious reasons, I won't go into more detail about it, but there you go : ) @ Shel – Thanks, yep getting close to the 20 number!

@ Camila – I have a number of different things that contribute to my revenue each month, but the main one I refer to hear is my Alpha project, and it’s commercial/business software related. For obvious reasons, I won’t go into more detail about it, but there you go : )

]]> By: camila http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank/comment-page-1#comment-9465 camila Tue, 06 May 2008 18:48:18 +0000 http://www.debtkid.com/?p=436#comment-9465 Im very curious about your business, can you post something about it? and good for your mattress! it is coming. Im very curious about your business, can you post something about it?
and good for your mattress! it is coming.

]]> By: Shel http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank/comment-page-1#comment-9464 Shel Tue, 06 May 2008 18:10:02 +0000 http://www.debtkid.com/?p=436#comment-9464 Wow you're so close to the mattress! Great job! A few thoughts on sleeping... Maybe now that you're unsatisfied with your current mattress and plan on getting a new one, it's affecting your sleep. You could sleep all day long but if it's poor quality sleep (and even more so if you're aware of it) you're not going to feel rested. Also, are you getting exercise, eating right all of that? It's all related. As far as the cash goes, I like the idea of saving a bit of it to cover a month or so of business expenses (and debt repayment) for peace of mind. It seems that it will also be easier to invest that remaining cash back into the business if you feel a little more secure. Wow you’re so close to the mattress! Great job!

A few thoughts on sleeping… Maybe now that you’re unsatisfied with your current mattress and plan on getting a new one, it’s affecting your sleep. You could sleep all day long but if it’s poor quality sleep (and even more so if you’re aware of it) you’re not going to feel rested. Also, are you getting exercise, eating right all of that? It’s all related.

As far as the cash goes, I like the idea of saving a bit of it to cover a month or so of business expenses (and debt repayment) for peace of mind. It seems that it will also be easier to invest that remaining cash back into the business if you feel a little more secure.

]]> By: ZINTRADI http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank/comment-page-1#comment-9463 ZINTRADI Tue, 06 May 2008 17:00:21 +0000 http://www.debtkid.com/?p=436#comment-9463 I would set a formula for what to do with additional profits from the business... i.e. 70% goes to reinvestment, 20% debt repayment, 10% to your salary. As things get more and more successful, alter the percentage to favor the debt reduction side... I would still keep a salary increase in there as a psychological boost. I would set a formula for what to do with additional profits from the business…
i.e. 70% goes to reinvestment, 20% debt repayment, 10% to your salary. As things get more and more successful, alter the percentage to favor the debt reduction side… I would still keep a salary increase in there as a psychological boost.

]]> By: David Robarts http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank/comment-page-1#comment-9460 David Robarts Tue, 06 May 2008 14:15:42 +0000 http://www.debtkid.com/?p=436#comment-9460 One investment you may want to consider is holding onto some of the cash so that you have less stress about cash in hand. It can make a big difference when you don't have to worry about how the current bills are being paid - you're free to worry about how to be more profitable rather than how to keep up on the treadmill. One investment you may want to consider is holding onto some of the cash so that you have less stress about cash in hand. It can make a big difference when you don’t have to worry about how the current bills are being paid – you’re free to worry about how to be more profitable rather than how to keep up on the treadmill.

]]> By: yp http://www.debtkid.com/not-feeling-so-hot-but-at-least-there-is-some-money-in-the-bank/comment-page-1#comment-9451 yp Tue, 06 May 2008 11:06:00 +0000 http://www.debtkid.com/?p=436#comment-9451 I totally agree with reinvesting in the business. I'm trying to think of a good analogy to illustrate this, but all I can think of now is paying off the debt being a marathon distance. You can try going on foot but that will take a very long time. Effort and money now in developing a car will get you there a lot quicker in the long run - pun intended - as well as get you going far on other races. I totally agree with reinvesting in the business. I’m trying to think of a good analogy to illustrate this, but all I can think of now is paying off the debt being a marathon distance. You can try going on foot but that will take a very long time. Effort and money now in developing a car will get you there a lot quicker in the long run – pun intended – as well as get you going far on other races.

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