The 70/10/10/10 Rule for Increase

If you read last week’s blog post, it may have left you wondering if entrepreneurs ever get to have any fun. After all, if you invest ALL OF YOUR PROFITS into your business, when do you get to enjoy the “fruits of your labor?” Whatever happened to “work hard, play hard” or better yet, “to the victor goes the spoils”? After spending most of my previous post analyzing the negative aspects of Parkinson’s Law and admonishing you to make sure you don’t overspend your profits or raises, this week I am going to encourage you to BLOW YOUR MONEY! Well, at least a little bit of it. There is nothing that will drain your excitement, creativity, and enthusiasm for your business than an attitude of all work and no play. It is imperative that you take some time (& money) for yourself.

Numerous studies have proven that employee productivity skyrockets after taking a vacation, which more than makes up for any lost time while the employee was away. (Do you really think that your boss gives you vacation time out of the kindness of their heart? This is Corporate America, baby! It’s all about the bottom line). This emphasis placed on rest & rejuvenation in many major corporations should teach us something about how we handle our own schedules as small business owners & entrepreneurs. Therefore, I want to give you a good rule of thumb to apply to any increase in your profits (for entrepreneurs), wage raises, or even seasonal or monthly sales bonuses. It’s called the 70/10/10/10 rule, and it will ensure that you keep your eye on the prize (financial independence) while not allowing yourself to get burned out, used up, and teetering on the edge of a nervous breakdown. This concept is not new, and I certainly didn’t invent it, but it’s an extremely effective way of handling your increase, so as to ensure your future success and prosperity.

The first 10% - Tithe It! As Christians, we understand the importance of giving your first fruits to God by tithing to your local church. There is a great deal of personal fulfillment that comes from being a cheerful and generous giver.

The second 10% - Blow it! – This is your chance to have a little fun. Go out to the nicest restaurant in town, take a weekend getaway to the beach, or get a full body massage. You deserve a reward for your hard work, and this will serve as a motivator to keep the profits rolling in. (Make sure and check out the video below for some more “Blow It” advice!)

The third 10% - Save it! I don’t want you to bury too much of your money because it won’t get you much in the way of a return (see the parable of the talents), however we all need a safety net, especially in these uncertain economic times. You eventually want to have about 6-12 months living expenses in liquid form, preferably in a money market account. Once you achieve that goal, you may decide to take this 10% and add to your investments or to your charitable giving (NOT MORE MASSAGES!)

The final 70% - Invest it! If you are an entrepreneur, look at testing and implementing some new marketing ideas. If the increase in profits is expected to be sustainable, perhaps you could look at hiring another employee. This would allow you to delegate more menial tasks, while leaving you to focus on more important decisions regarding the vision and direction of your company. As an employee, you should take your 70% and begin saving it as seed money for the launch of your own business. If you are into real estate, you could save it as a down payment for a rental property, or even buy a stock in a company you believe strongly in. The important thing is that you are taking the majority of your increase and sowing it into the financial realm, rather than into depreciating material assets that never satisfy.

“In the house of the wise are stores of choice food & oil, but a foolish man devours all he has.” Proverbs 21:20, NIV For more insight on this principle, check out this clip from one of my recent economic empowerment conferences…

Falling Prey To Parkinson's Law

First articulated by Cyril Northcote Parkinson in the early part of the 20th Century, Parkinson’s Law states that "the demand upon a resource tends to expand to match the supply of the resource*." This concept has been applied to numerous areas of life, from politics to computer data, to point out the fact that the more we have of something, the more we tend to use. In financial terms, Parkinson’s Law can be summed up in 4 simple words, “Make more; spend more.”

One of the biggest mistakes that new & aspiring entrepreneurs make is not adequately investing in their businesses. Whether it’s a new business owner skimming a little too much of the profits for personal enjoyment, or an employee wasting a raise or Christmas bonus on upgrades to their material possessions, most of us have the tendency of falling prey to Parkinson’s law. In fact, studies show that through the availability of credit, American’s have in essence re-written Parkinson’s Law. We don’t only let our expenses rise proportionately with our income; we actually let them outpace us by spending an astounding 114% of what we actually earn!

Unfortunately this is another area of life where the church at large has followed right in step with the world, and its results are tragic. This fiscal unfitness that is so prevalent in our pews paralyzes us from taking action on our God-given visions and prevents us from starting or expanding our entrepreneurial efforts. The body of Christ must make a change, and it starts by breaking the law…

The key to success in your business and finances is to make a concerted effort to violate Parkinson’s Law. I tell my students all the time that there are only 2 ways to make room in your budget, and that is to make more or spend less. When you receive a raise or bonus, or your business has a good month, you have to resist the temptation of allowing your expenses to expand, filling up this new found room in your budget. This extra money is in fact a seed, that when sown into a God-directed financial endeavor, can produce a harvest of prosperity and blessing for you and your family.

Take a few minutes and check out this short clip from a recent financial conference at which I shared a few more insights about the phenomenon you now know as Parkinson’s Law. Have a Blessed Week!



* Wikipedia, The Free Encyclopedia, www.wikipedia.com, accessed 10/22/2008

Financial Sanctification: Are We Set Apart?

As the world goes, so goes the church. The recent economic turmoil has once again served as a reminder of how most of us in the church still haven’t figured it out. We have been called to be separate, set apart, different. As the hackneyed maxim goes, our lives (and our finances) are supposed to be in the world but not of the world. However, just a little research will quickly reveal that the divorce rate, abortion rates, and even the existence of poverty, is the same in the church as it is in the secular world. We should not be affected by the economic cycles and shifting winds of Wall Street. But inevitably we are…

God longs to bless us even in the midst of economic downturns. He wants us to be the city on the hill, the ones to which the lost and hurting are looking to and asking themselves, “Why do they seem to be immune from what the rest of us are dealing with?” In fact, Paul speaks to this fact in what I believe is his call to an entrepreneurial church in 1 Thessalonians 4:11 & 12;

"Make it your ambition to lead a quiet life, to mind your own business and to work with your hands, just as we told you, so that your daily life may win the respect of outsiders and so that you will not be dependent on anybody." (NIV)

Paul admonishes the church to work hard and mind their business for 2 very important reasons. The second one, which we will focus on more in later entries, is to become financially free so that you “will not be dependent on anybody.” The first reason, however, is so that “your daily life may win the respect of outsiders.” Who are the outsiders? It’s the lost; those who don’t know Christ as their Lord & Savior. Those who are “outside” of the church are always watching those who are “inside.” In the same way that we are called to be set apart from sin and depravity, we should also be an example to the lost in our independence from the typical ups & downs that come from the economic cycles of the world.

However, because we spend WAY above our means (just like the rest of the world) and because we don’t tap into the divine creativity that has been placed inside of us to start successful businesses and profitable endeavors, we suffer the same fate as those who have no heavenly blessing at all. Therefore, when the “outside” looks “inside” they don’t see any real significant difference. What is there then to draw them to take a closer look? We have become so much like the world in both actions and appearance that we have lost the ability to “win the respect of the outsiders” when they take a peek inside our walls.

These words are certainly not intended to discourage you, but rather to challenge you to take a closer look at your life, finances, and career. Perhaps you need a heavenly paradigm shift, so that you can begin to see your career or business as a spiritual calling rather than a secular annoyance. It is (or should be) part of your contribution to the advancement of the Kingdom of God, and thus should constantly be examined and perfected by the wisdom that comes only from above.

In the coming months, (& years if the Lord tarries) I will be sharing some powerful scriptures that reveal God’s desire for a prosperous church of entrepreneurs and successful business owners. I will also be bringing you insightful interviews with Christian leaders, weekly motivation, and various online seminars to help you take your idea, invention, or service and turn it into a profitable reality in your life & business. If you would like to receive regular e-mail updates on our powerful training, you can register anytime at www.e-mandate.org.

Looking forward to lifting you higher,

Matt Robinson
Portico Wealth Training