GPWA Times Magazine - Issue 31 - February 2015

You don't get to make a $5,000 business investment by going through your pock- ets and checking whether you happen to have enough money. You make that kind of investment from the company account, when the company is big enough to cover such an expense. And what if it's a $5,000 per month investment? There's no chance you can do that from your pocket; you can only do it if you know your company is making enough money every month. Rule No. 3 Pay yourself first First pay the entity that earned the money and then pay everyone else. In the case of a company, it means you'll first take a frac- tion of the incoming payment — say, 10 percent — and store it in a safe place. The remaining 90 percent can then be used for everything else — salaries, investments, expenses. If there's not enough, there's not enough, but you can't touch the 10 percent. The same principle applies to your personal salary. Poor people pay ev- eryone else first. Let's assume all of your personal income is coming from your affiliate business. When your ''company'' receives a pay- ment, 10 percent is immediately stored in a separate drawer; call it a sustainabil- ity fund. The remaining 90 percent goes to the company ''account.'' You don't see the money until it's time to pay yourself a salary. And when you get the lousy sal- ary your company was willing to pay you, you first take 10 percent and store it away, only then going through the bills. Think of it as a tax with one big difference – it's you who gets the money. If you're paying taxes, pay yourself first and then pay the government. Always put yourself first. If there's no money left at the end of the month, it means you have to earn more, but don't touch your golden reserve. This way, both you and your company are getting richer. You can later use both funds for whatever purpose you want; it's your money, after all. But having these different drawers to begin with is crucial. From hobby to business If you have an affiliate website or multiple websites that you're working on yourself and you still have a day job, you have a hobby with nice potential. If you don't have a day job anymore, you're self-em- ployed. The difference between these two is just the money you're making. If you have a registered company and/or are treating your business as if it is a compa- ny, you're a small company owner. These are the three basic levels of independence from working for a paycheck. Having a day job isn't a bad thing if you're bootstrapping your project and making your business grow. The fact that you have a salary is very helpful as your business has a steady flow of income to fall back on if necessary. But if you treat your project as just something on the side which gets you a couple of hundred here and there, then that's all it's ever going to be. Affiliate Finance 101: The three golden rules of money management for affiliates