Many of us have such small home businesses that any money we net after expenses goes directly into the family coffers. As a matter of fact, it may be hard to imagine that your home business will ever be so successful that you will make MORE money than you can spend on a monthly or annual basis. This may happen, however, and when it does, you will have to decide what to do with the excess profit. Do you save it? Invest it back into the business? Or do you invest the profit in other ways and work to grow your wealth even more?
A basic savings count is always a good idea—whether it is for your household finances or for your business. If you can get to where you do not need to take all of the profit or income out of your business that comes in, then putting it away or leaving it in a savings account can be a safe, secure way to start building some wealth. It can also give you a way to save up for future business expenses like a computer or equipment or licensing. Investing the money, however, has the potential of earning you even more money and this is how you can really create some security for your family.
You can choose to invest in anything you’d like: property, another business, stocks and bonds, and even art collections can be a way of taking excess business profit and putting it to work building more money. If your business finances have been simple, it is a good idea to see your accountant or financial planner/consultant before making investments with your business profit. You will need to learn how to keep accurate records and you may even be able to gather some advice on what is the best way to invest and how to make a long-term plan for the profit. Keep in mind that you will want to keep some of the excess money liquid in case you need to put it back into your business.
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