How the Heck to Invest and Reach Nirvana: Business sustainability planning

There are very few businesses that would turn profitable from day one. If yours is one of them, kudos to you. But most businesses would go through phases of making investments, advertising, marketing, losses, recovery, breakeven, profitability, and finally become cash positive.?

You would not want your business losses to claw into your financial freedom fund. That would be a risky way to go.

You will have to ascertain an approx period for breakeven and investments/funding needed till breakeven is achieved. This planning should involve salaries, rent payments, promotional expenses, and working capital requirements. Let’s say it costs 50 Lakhs today to setup a business and run it till it breakeven. Find out how much you need to invest over the next 15 years for this goal. You may fund this differently in reality, but right now you need to plan as if you will require to be able to put in this kind of money.

With this plan in place, you have a good estimate of the money you need to make this transition without it being a financial burden that forces you and your family to compromise your lifestyle and important goals.?

At this stage, you are seeing the Total Monthly Investments required without having deployed your current saving and investments to your goals, so it is higher. Now the good part for those who have savings and investments that they can deploy – this number will reduce. Let's see how to do it effectively.?

Deploy your current lumpsum savings and investments:?Check the 4 options for deploying your current lumpsum money and select one. Check how much the monthly investment amount is for each case and go with the one that gives the lowest monthly SIP. Save this. Now, if you see the tile for the goals you will see the ones where your lumpsum investments have been allocated.?

But what if you can’t invest the amount required every month??You can still meet all your goals by starting with what’s the best you can do today and topping up your monthly investment plan every year by a certain amount.

Read more in the book ‘How the Heck to Invest and Reach Nirvana’ by Raymond Moses for FREE.?