We’re all concerned with the bottom line. If you don’t have money coming in faster than it goes out, your business can close down. This limited mindset makes us scrutinize every purchase. When deciding whether or not to commit funds to something, you need to ask yourself a question: are you spending money or investing it?
Spending money means you are giving money in exchange for goods or services of relatively equal value. Furthermore, when you spend money, the item you are spending on loses value over time. This doesn’t mean that spending is always a bad decision. It is a decision that should be carefully thought out.
An investment provides more value over time. This isn’t limited to investment vehicles (stocks, bonds, etc.). It includes education, self-improvement, professional certifications and other items that provide more value over time. The difference between spending and investment can get blurred. If a piece of office equipment would be nice to have, that qualifies as spending. If that same piece of equipment will being in new business or cut expenses, it becomes an investment.
Think carefully about spending and investing. When deals with limited capital, investing should always come first.
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