For the last year I have automated a transfer of $100 from my checking to my savings account every week.Â This is not a new idea.Â Many financial advisers will recommend taking advantage of automatic money transfers as a way to ensure good saving habits.Â I had been taking the money from my savings account and moving into a brokerage account to buy stocks.Â Â This was all part of my retirement planning.
In the last few weeks I’ve changed my perspective.Â With the costs of starting an online business so low it’s possible to use as little as $500 to fully test the profit potential of a business.Â I will continue to use that money to invest,Â but I’ll be using more of it to invest in my own business ideas.Â In that way I control the risk rather than being at the whim of the market.
With $100/week and $500/business to test I could market test approximately 10 business ideas every year.Â There are 2 likely outcomes if I maintain this and do many tests.
- Sooner or later one will work and it’ll start bringing in cash.
- I’ll learn something valuable with every idea I test, improving the chances that the next one will take off.
Lets work out the math involved with some imaginary numbers:
10 business ideas @ $500 each =Â $5000
If just 1 of 10 is successful and can make an average of $100/week then I’ll make back my investment in 1 year.Â Adding $5200 of income every year is way better than you’re likely to get from putting $5000 in the stock market.Â Also consider that it could be very possible to take a successful business idea from $100/week in profit up to 2, 3, 4 or $500/week with good marketing.
Using the money put aside for investing to invest in myself rather than in others should eventually pay off.Â The risks are high in a startup, but I would also be in control of them.Â The quality of my ideas and the efficiency with which I can test them can reduce that risk significantly.
Are you regularly saving money in mutual fund, ETFs, or high-yield savings accounts?Â Consider funneling some of that automatically into a business you control.