For any business owner, building wealth is a key goal. Whether you are in your first year of business or your fiftieth, coming up with strong strategies to accrue more funds can help you hit your short- and your long-term goals. Unfortunately, many business owners let their money get stuck in “lazy mode”—a.k.a. a mode where it is not being put to work. Today, we are going to talk about our top strategy for building wealth in a way that is automatic, systemic, and sustainable.
Why Business Owners’ Don’t Often See Growing Wealth
Any business owner knows how important it is to have cash on hand, for bills, payroll, utilities, and more. While you have likely heard the mantra of “pay yourself first,” the reality is that it can often feel like every dollar is being pulled in a different direction—and that direction is typically the opposite way from your wallet. Paying yourself first, and figuring out what your paycheck should even be, can feel like a lot to tackle. However, with a wealth building account, you can solve this problem and work to grow your business at the exact same time.
What is a Wealth Building Account?
A wealth building account is a money market account that is separate from your business’ operating account. This account serves as a holding tank for your future—whether it is for emergencies, goals, or opportunities. After setting up a wealth building account separate from your personal and business banking institution, you can automate your contribution to it each time you get paid. These funds are to be redeployed for the specific use of accomplishing your goals. It’s no different than paying any other expense on your business’ balance sheet, but the difference is the money you put towards it is designed to immediately starts working for you.
How Does a Wealth Building Account Work?
With a wealth building account, once your determined amount (typically 20%) is set up to automatically deposit, the money within the account can begin growing. We may have those funds to buy equities or bonds, reinvest in your business, or stay afloat during economic downturns. With this kind of system, you work to have true liquidity so you are in a better position to utilize the funds for whatever you need in the short term, while also giving it the opportunity to grow for the long-term.
If you would like to chat more about your options for building wealth and running your business, we would love to talk! Contact us today to learn more about how we can help.