Sunday, December 28, 2008

Compound Money - A Way to Make Your Business Thrive

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If you really want your business to thrive, you have to compound money. If you're not sure what this means, you're in for quite a treat. You are going to find out in just a couple of minutes what it means to really make your money work for you. First of all, if you are thinking of starting a business or you have an existing business, you have to be very careful with your money. If you're not, then you are facing complete disaster.

So take your cash and instead of spending it on unnecessary things, you need to put it back into the business. Every single time you make a profit, you need to turn that money around and keep it from being consumed. Let it grow.

For example, you sell basketballs. You buy 15 basketballs for $5 each and you sell them for $10 each. Your investment was $75 and you came out in the end with $150. Now, you need to take that $150 and buy 30 basketballs. When you sell all of those basketballs, you then have $300. You continue the process over and over. As you can see, your only out-of-pocket investment was $75. The rest of the money you have spent has been your profits, so you're really only at a $75 loss. This is responsible money management.

So if you really want your business to thrive, make sure you grow your money right from the beginning. If you've already established your business, it is never too late to start making your money work for you. You'll feel much better about what you're doing.

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