With a businessman running against a career politician in this year’s presidential race, one topic of discussion has been the pros and cons of running the country like a business.
The idea has been broached before, with several past presidents boasting more business than public service experience. In fact, 2012 presidential candidate Mitt Romney once said, “I’d like to have a provision in the Constitution to say that the president has to spend at least three years working in business before he could become president of the United States.”1
With that said, it may not be a bad idea to consider our own financial situation within the context of running a business.2 For example, you don’t want to carry more debt than your current income can cover, and always be mindful of cutting expenses as a means of increasing your savings. If you’re looking for ways to be confident about your financial future while maintaining your current lifestyle, we can explore insurance options to help you work toward that goal.
Much like a business, most households possess two types of assets: Their own labor and financial capital. One of the keys is to convert the proceeds from today’s labor into capital to support the family — both now and after you retire.3
During the recession, 15 percent of millennials were unable to find jobs, adding to the issues they faced while starting out adult life, including some with student loan debt. While many are now employed, millennials, in general, have learned early on the fundamentals of a balance sheet.4
Regardless of whether they document their finances with a “profit and loss” statement, many are well aware of the necessity of managing incoming revenue against the costs and expenses of their day-to-day lives.5
Having a constant understanding of where you stand financially is important in your professional and personal life, but in some ways, perhaps it’s better to run our businesses like our households instead of running our households like a business. In other words, have a bit more fun. Stop feeling like we have to earn more just to keep up with neighbors or colleagues, opting to live below our means and focusing on more humble and lower-cost desires.
For many, wealth is defined by the richness of their lives, the depth of their relationships and the comfort of knowing that they have enough.6
1 Kara Ohngren Prior. Entrepreneur. Feb. 15, 2016. “8 U.S. Presidents Who Started as Entrepreneurs.” https://www.entrepreneur.com/slideshow/224122. Accessed July 28, 2016.
2 Ken Clark. Investopedia. 2016. “Run Your Personal Finances Like a Business.” http://www.investopedia.com/articles/pf/08/run-finances-like-business.asp. Accessed July 28, 2016.
3 Douglas McCormick. Knowledge@Wharton. July 14, 2016. “Family Inc.: Bringing Business Lessons Home.” http://knowledge.wharton.upenn.edu/article/family-inc-bringing-business-lessons-home/. Accessed July 28, 2016.
4 Mark P. Cussen. Investopedia. May 19, 2016. “Money Habits Of the Millennials.” http://www.investopedia.com/articles/personal-finance/021914/money-habits-millennials.asp. Accessed July 28, 2016.
5 Winnie Sun. Sun Group. March 31, 2016. “5 Surprising Millennial Money Stats.” http://sungroupwp.com/2016/03/31/5-surprising-millennial-money-stats/. Accessed July 28, 2016.
6 Libby Kane. Business Insider. July 26, 2016. “7 signs you’re rich, even if it doesn’t feel like it.” http://www.businessinsider.com/signs-youre-rich-even-if-it-doesnt-feel-like-it-2016-7. Accessed July 28, 2016.
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