“Everyone should be in two businesses.  Whatever business they operate, and the banking business.”  – R. Nelson Nash

The quote above comes from one of my early mentors and it’s just as valuable today as when I first heard it.  First of all, this applies to everyone, not just business owners.  When he refers to the businesses we operate, he’s including anyone who works as an employee and earns a wage.  Whether we are incorporated or not, we should all view ourselves as the CEO of “Me, Inc.”.  The idea of dueling businesses applies to each of us.

In the spirit of Small Business Week, I figured we could focus on the “small business” of our personal finances, which is what Mr. Nash is referring to when he speaks of the banking business.  I like to refer this as a money management system rather than a bank, but he has his own terminology.

Let’s start by making the obvious connection between your two businesses.  For sake of argument, pretend you are a contractor and you serve your local community.  You are rewarded for your service with nice green certificates of appreciation (also known as cash).  If this cash is going to be stored somewhere other than your wallet, it’s likely going into your checking account.  From there, you allocate part of the cash to savings, another part to paying for your truck, and the rest to your lifestyle.  So your primary business/job that drives your revenue/paycheck feeds your money management system.

When talking about financing your truck, or any other piece of equipment, the traditional thinking is that this is done through a commercial bank and that you make monthly payments over the years.  What if your money management system could finance the truck/equipment and the payments came back to you?  What if the interest earned on that money were now building in your money management system rather than just being paid out each month?  The answer is that you would now be in the banking business, as Mr. Nash recommends.

We refer to this system as the Perpetual Wealth Code.  It’s a simple, though not always easy, process of recapturing the interest and fees paid to money managers by accessing your own capital.  Whether you finance a work truck, a new copier, or fishing boat, the method and the results are the same.  More control over your finances and greater increase in your wealth.

There are many ways to go about this process, but it is much easier when you have a guide who practices what they teach.  Feel free to reach out with questions.

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