How to Make Money But Not Feel Broke with David Richter

Dec 26, 2024

David Richter, author of "Profit First for Real Estate Investing" and owner of Simple CFO, shares insights on financial management for entrepreneurs. He emphasizes the need for a profit-first mentality, highlighting the importance of tracking income, expenses, and savings. Richter discusses how to combat the feeling of being broke despite earnings and the necessity of establishing dedicated bank accounts for financial clarity. With practical steps and strategies, he guides listeners on retaining income and cultivating good money habits, even starting with just 1% savings.

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INSIGHT

The Game of Money

Many entrepreneurs focus on making more money, but neglect keeping it.
Entrepreneurship is ultimately about playing and winning the "game of money."

ADVICE

First Step to Keeping Profit

Reverse the typical profit formula: Sales - Profit = Expenses.
Open separate bank accounts and label them clearly (income, expenses, profit).

INSIGHT

The Three Most Important Numbers

Track what you make, spend, and keep, especially cash flow.
These numbers provide clarity and help solve the right business problems.

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Profit First

Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

Mike Michalowicz

In 'Profit First', Mike Michalowicz introduces a behavioral approach to accounting that flips the conventional formula from 'Sales - Expenses = Profit' to 'Sales - Profit = Expenses'. This system involves taking a predetermined percentage of sales as profit first and then allocating the remainder for expenses. The book provides practical, step-by-step advice and case studies to help entrepreneurs manage their businesses more effectively, ensuring early and sustained profitability and long-term growth.

Rich Dad Poor Dad

What the Rich Teach Their Kids about Money - That the Poor and the Middle Class Do Not

C.P.A. Sharon L. Lechter

Robert Kiyosaki

The book tells the story of Robert Kiyosaki's two fathers: his 'poor dad,' a highly educated but fiscally poor man, and his 'rich dad,' the father of his best friend who was a successful entrepreneur. It emphasizes the importance of financial education, distinguishing between assets and liabilities, and building wealth through investing in assets such as real estate and businesses. Kiyosaki argues that a good education and a secure job are not guarantees for financial success and provides practical lessons on how to make money work for you rather than working for money[1][3][5].

The Common Path to Uncommon Success

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John Lee Dumas

The Richest Man in Babylon

George Clason

This book, written by George S. Clason, uses a series of parables to convey fundamental principles of personal finance and wealth accumulation. Published in 1926, it remains highly relevant today, offering practical advice on saving, investing, budgeting, and financial discipline. The parables are engaging and easy to understand, making complex financial concepts accessible to readers of all backgrounds. Key principles include paying yourself first, living within your means, and making money work for you through wise investments. Despite its historical setting, the book's core lessons are adaptable to modern financial practices and have had a profound impact on countless readers worldwide.

The Toilet Paper Entrepreneur

Mike Michalowicz

The Toilet Paper Entrepreneur by Mike Michalowicz is a unique and entertaining guide for aspiring and established entrepreneurs. The book uses the analogy of surviving with minimal resources, like using the last few sheets of toilet paper, to illustrate how entrepreneurs can navigate and succeed in business with little to no initial capital. Michalowicz breaks down the book into segments on belief, focus, and action, emphasizing the mental game of entrepreneurship, identifying one's purpose and passion, and executing ideas through strategies like 'tacking' and saying no to non-ideal customers. The book also covers operating on a shoestring budget and provides actionable steps for growing a business without traditional financing[2][3][5].

Profit First for Real Estate Investing

David Richter

Profit First for Real Estate Investing, written by David Richter, is a financial management guide tailored for real estate investors. It adapts the Profit First method, originally created by Mike Michalowicz, to the unique needs of real estate investing. The book provides a simple cash flow system that prioritizes profit allocation and disciplined expense management, helping investors to reduce stress and build a healthy and profitable real estate business. It includes practical steps such as setting up specific accounts, assessing financial health, and leveraging financial data to attract better deals and private lenders.