February 12th, 2013 1:37 PM by Eileen Denhard
Everyone needs to save--especially business owners. Sure, we all dream that our enterprises will prosper and flourish, but the reality is that there are sure to be plenty of rainy days in the future.
Smart entrepreneurs set money aside to weather those storms.
Take me, for instance. For the past five years, I've earned six figures from my business. This year I'll be lucky to earn five. I gave up a high-paying gig, and now my monthly income doesn't come close to covering my expenses.
But I'm not panicked. In time I'll earn more money; meanwhile, I can live off my nest egg. You see, over the years, while I was making much more than I needed, I socked away money in savings.
As a result of my forward thinking, I'm able to focus on the big picture ahead instead of freaking out over day-to-day expenses. It's a sweet feeling and one you can enjoy yourself--if you take action now.
How Much to SaveThe standard recommendation from financial advisors is to save 10 percent of your income. That's a nice guideline, but the truth is that each person's situation is different. I have three recommendations.
Where to SaveDon't just put the money into an account that pays 0.01 percent interest. There are ways to earn a return on your nest egg.
Building a buffer of savings in the bank is like buying business insurance. Thanks to the cash cushion I built up over the years, I now know that I can cope with whatever the economy throws my way.