023 WF: Your Dollars Are Your Employees

WealthFast Podcast show

Summary: If you had a bunch of employees, would you pay them to sit around and do nothing all day? Would you pay them to paint their fingernails, watch TV, and sleep late? Of course not. That behavior will never earn your business any money. If you pay all of your employees to do nothing -- to be lazy and unproductive and value "leisure" over real, productive work – you will eventually run out of money and you won't be able to hire anyone. Well, your dollars are your employees. They need a job, just as much as people need a job. Think about it: workers are called "human capital." Money is just plain capital. It needs to be managed just as much as your workforce would need to be managed. A budget is a way of giving each dollar a job. You'll know what function each dollar is filling, rather than wondering what all your employees are doing. Not every dollar can directly earn new money. Some dollars need to be spent on overhead costs, such as food, shelter, and clothing. But as every business leader knows, the less you spend on overhead, the more you can invest in resources that will yield a direct return. We discuss this concept in today's podcast. Enjoy! Mentioned in this episode Lending Club Prosper Lending Index Funds