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Foolish Philosophies:  Blast Through Obstacles To The Life You Desire

“A penny saved is a penny earned.” ~ B. Franklin

When it comes to expenses less really is more.  Too many people think that to be in business they have to spend money.  Office? Check.  Business Cards? Check.  Desk? Check.

I say, “Uncheck!”

You don’t need those things.

It might make you feel productive, but you won’t actually be.  What it will do is take money away from your savings, which could be used to live on so you could quit your job.  It’ll also make it harder to be profitable since you have to pay back those expenses before any of the money goes into your pocket.

How about a new computer?  If you don’t have one, go to craigslist and buy a used one.  Spend as little as you can on a computer that is able to do what you need.  When the money starts rolling in you can go buy that cool looking Mac with two wide screen monitors at the Apple store for $5,000.  You won’t need it, but it sure would look cool on your desk.

To get your online business started, you need Internet access, web hosting, a domain name, a computer, email management system and a PayPal account.  I’ve said on the show that you could get away with getting started without spending any money, but it will make things more difficult for you.

Click here to get my recommended web host.  I use them.  I run several clients’ company sites on their servers.  They advertise getting started for as low as $4.95/mo, which their lowest cost service is all you would need to get started.

It’s Not Business, It’s Personal

Now that I’ve covered “business” expenses, it is time for me to hit the more controversial topic of personal expenses.

When you have your own business there is no difference between a business expense and a personal expense.  [The tax man sees it differently and you should keep track of your expenses accordingly.]

Every dollar you spend in your business or your personal life (remember: there’s no difference) is a dollar you HAVE to earn.

Actually, here is a difference between personal and business expenses: you have to earn more than a dollar for every dollar you spend in your personal life.  How much depends on your income tax bracket.

Let’s guess on the lower end and you would have to come up with $1.25 for every buck you spend on cable and that sexy 52″ HD flatscreen and Dolby surround sound.  I can feel the couch shake right now as the t-rex stalks the Jeep as I rewatch Jurassic Park for the umpteenth time.  My daughter surely won’t need braces when she’s older–I hope.

Flatscreen TV + Sales Tax + Income Tax Bracket = No Online Business

I usually hear the same response as those personal finance gurus when I mention cutting back on expenses, “I have no where to cut! I’m living paycheck to paycheck right now.  Are you crazy?  I have two teenage boys who eat as much as a Roman legion.  There’s no way!”

Obviously, they are really animated after their eighth mocha espressoadrelineccino at $5 bucks a shot.

But I’m not going to cover the typical little things like the budgeting gurus.  I want to hit the hard stuff.  How about that car you bought for $25,000 last year?  A $5,000 used Civic will get you to work.

How about your big house?  I know you can’t sell it in this economy, but you could rent it out and get a small apartment right next to your work so you won’t even need a car.

I’m not saying you should or shouldn’t do these things nor am I saying you should do anything Izzy and I haven’t had the courage to do ourselves.

Izzy has said that he cut his family’s expenses–even taking his daughter out of her beloved dance lessons, to be able to make a much bigger dream for his family come true.

During one turbulent period of my life while trying to start a new business, my wife and I rented out our lovely house and moved into a 700 square feet apartment in a fourplex, which cost under $500 a month–with our baby girl.

My wife drove a five year old, paid-for Dodge Neon to her job while I rode my bike to a tech school so I could learn web programming all while prospecting for clients.  Talk about pressure.  But I had a dream I believed was worth it.

Live Life On Your Terms With The Freedom To Pursue Your Dreams

Lowering expenses will lower the bar for quitting your job and living on your own terms.  You can always increase your expenses later when your business takes off.  No decision is ever permanent except one that gets you killed.  Dropping your cable TV subscription isn’t one of those.   Getting rid of your pretty new car isn’t.  Moving into a cheaper place isn’t permanent either.

Maybe your friends and family will think you’re strange for giving up the American Dream (rat race), but when your online business starts paying the bills and you begin living your life on your own schedule anywhere in the world you choose those naysayers will be jealous and start asking you how you did it.

~ t

This article contains an affiliate link. We will be compensated when you purchase using that link.  Izzy and I want to thank you in advance for helping to support our work here at Foolish Adventure.