Reinvesting

Posted: - Modified: | finance

I’m looking forward to receiving the first bonus of my working life. =) Thinking about it, I’m reminded of a story my mom told us a number of times. It goes something like this like this:

Two entrepreneurs each start off with a variety store. The first entrepreneur takes the profits from the business and reinvests practically everything back, growing the store into a larger one. The second entrepreneur takes the profits and buys a television.

Business is good. The first entrepreneur takes the profits from the business and reinvests practically everything back, opening a new branch. The second entrepreneur grows the store a little bit, and then buys a video player.

Business continues to do well. The first entrepreneur branches out into another business. The second entrepreneur grows the business a bit more, and gets a new car.

The first entrepreneur works very hard, and soon owns a chain of stores. The second entrepreneur has a small business and a comfortable lifestyle.

At the end of the day, who’s happier?

My mom told us this story to show us several ways of thinking about business and money. She said that my dad is very much like the first entrepreneur, reinvesting as much money back into the business as possible. My mom and my dad agreed to do it that way. The business has certainly flourished.

She also told us how she helps make sure that it’s not just about that way of doing business, though. Drawing a little bit of inspiration from that second entrepreneur, she made sure that our family gave ourselves permission to spend money to create memories and make life wonderful (and that’s not just by buying stuff). So we went backpacking across the US and Europe, and we had lots of adventures.

A good life is a mix of both: reinvesting for growth, and enjoying the results.

So part of my bonus will go to my retirement fund, because it’s good to plan ahead.

Part of my bonus will go towards investing in myself, further developing the skills that helped me get that bonus in the first place.

Part of my bonus will go to exploring life and sharing experiences with people.

If you think of your life like a business, you can make more conscious decisions about how you spend money.

You can comment with Disqus or you can e-mail me at sacha@sachachua.com.