Before Trevor Noah ventured into comedy, he had the opportunity to take over a friend’s business selling bootleg CDs while he was in high school. When he started, all he had was a dial-up connection and 24k modem that took a whole day to download an album. “But technology kept evolving and I kept reinvesting in the business. I upgraded to a 56K modem. I got faster CD writers, multiple CD writers. I started downloading more, copying more, selling more,” he says. With more reinvestment, he introduced party CDs and mixtapes and make huge profits off of it.
For Warren Buffet, one of his early investments was in high school, when he and a friend bought a used pinball machine for $25 and installed in a barbershop. The game proved to be popular with the barbershop’s clientele, so the entrepreneurial duo reinvested their profits to buy more pinball machines. In time, they had eight machines in several shops. Eventually, they sold their venture, and Buffett used his portion of the proceeds to buy stock and then launch another business. By the time he was 26, he’d accrued $174,000 — or $1.4 million dollars worth of value in today’s market.
There’s a vital lesson to be learnt from those two stories: re-investment fosters business growth. The overwhelming desire to ‘reap the fruits of labour’ has made most small-business owners start out by pocketing whatever the business earns, considering any company profit to be their salary. That’s not a bad idea, really. That move will definitely fetch you same amount of profit year after year, or maybe a little above that if you’re lucky.
Reinvesting profit in your business is the best way to build wealth and crucial to the continued growth and success. It will not only bolster your brand’s competitive edge, it will also reduce business risk and realize long-term financial rewards.
You really want your money to grow like grass? This is the way to go —->>>