Why your money is just like a tube of toothpaste
|Apr 23, 2019|
Every now and then, I hit the bathroom jackpot.
No, don't worry - it's safe to keep on reading.
Every now and then, I have a brand new tube of toothpaste. On the same day that my electric toothbrush is fully charged. And has a brand new head on it.
When those three things happen together, it's like a toothpaste party.
But, have you noticed that when you're starting a fresh tube, it's not just a toothpaste party - it's a free toothpaste party. You're slapping that paste all over your brush ... some slipped off and fell down the sink ... no worries, I've got tons of the stuff, let's just fire another colossal ball of it onto my brush. No pea-sized amounts for me my friend.
And then, a few weeks later, as the tube is almost exhausted, you pick up your toothbrush and eke out the final few scrapes of paste. You fold the tube back, rolling it in on itself. A pea-sized amount would be a luxury. I'm going to make do with a third of a pea. I can handle it.
And you know what?
Your teeth stay clean. A third of a pea is all it needs.
But when you've got a full tube of toothpaste in front of you, you don't think like that. Because it feels like it will last forever. Even though you know it won't.
This wasn't my analogy - it was Mike Michalowicz's. He uses it to describe how actually, when you're spending money in your business, you can be mislead by your bank balances.
If you've got £10000 in your bank account, it's going to look like that full tube of toothpaste.
You know you've got to keep some aside for your tax. You know you need to pay yourself at the end of the month.
But that little voice at the back of your mind is saying "no pea-sized amounts for me - I've got ten grand!".
And you spend it.
And it's gone.
And when it comes to paying yourself, once more, you have to make do with scraps.
If you put some money aside before you begin, you might only have £5000 in your bank. It still seems like a lot. You still feel like spending it.
But this time, you're safe to do so.
Because the other £5000 is safely locked away in a different account. Ready for when you need it.
It's just human nature.
Play to your strengths, don't fight your instincts.
Take your Profit First and then you're free to spend whatever you want.
If you'd like to know more, check out the free "Hacker's Guide to Quitting your Job"