We all like to buy cool things, but how do we decide where to put our money?
The Joy of Stuff
There are so many amazing things in our world, it’s easy to want to buy all of it, and some of it, we should. Most of us need good gear to calculate spreadsheets, run payroll, talk with customers, create products, and in general, do our job. After all, there’s a difference between buying a much needed lens and buying a Tesla.
Setting Ourselves Up for Success
Unfortunately, money is finite. We don’t have an unlimited pool of it to buy everything. Instead, we often have to make choices and calculate opportunity costs, realizing that when we buy one thing, that means we can’t buy another. Which is more important?
To stay in business we need to find the right things to spend money on – tools or toys. We need to know when we’re buying stuff that is fun, but doesn’t help us financially, and when we’re buying gear: stuff that makes us money. In order to keep improving our business, we need to make wise decisions on what we buy and why.
If you’re like me, you want to make money for your business. At Cedowin Productions we provide video production services to Saratoga Springs and Ballston Spa. Every time we spend money wisely, that’s a better opportunity to keep costs low.
At the same time spending money wisely means spending money; it’s hard to do quality video work without good equipment. The trick is to understand when something is gear that will have a strong return on investment and when it is stuff that costs way more than it brings in. So how do we decide when it’s stuff, and when it is gear? There are three easy ways to tell:
Aligned Purpose:Does the reason you’re purchasing this line up with your goals?
Appropriate Appeal: Is this cutting edge when your customers are mainstream?
Optimized Return:This is probably the most important consideration. What does it cost? How much income will it generate? In short: are you getting real bang for your buck.
We all like stuff, and sometimes we need something that we can just have fun with. But when it comes to using our money wisely, applying these three concepts to the majority of our purchases will best prepare us to maximize our finances and our potential.