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December 25, 2008

Where to spend?

Most of us have some cash reserves, no matter how small, at the end of the year. What are you going to do with that? The way I see it you have three options.

1) You can spend it on improving your abilities and knowledge in some way

2) You can reinvest it into your freelance career or consulting business

3) Or you can invest it in another company or financial security somehow. (Maybe even real estate)

The choice is clear and the decision is pretty straightforward. Where will you get the best return on capital? Think like a client, they won't spend money with you unless it provides the best returns for what they are trying to do.

Why should you be any different?

Option 1 is really about enablers and abilities. This is very wise to consider if you are lacking in skills that can earn you more revenue. Sales training for example, with a reputable vendor, can provide you with a powerful skill set that will return you many times the investment.

But the skills need to be something that will add to your bottom line, or that will allow you to expand your offerings into other commercial areas somehow.

Option 2 is where I like to invest. What can I put cash into today that I can leverage to sell more consulting and generate greater revenue. These are assets, not enablers. Enablers will, when combined with assets, hlp you to generate more wealth.

Assets, well marketed, will generate revenues with little additional efforts.

Software, SaaS products, training course development, Intellectual Property, and online communities are all forms of assets. All examples of how you can leverage todays cash to produce tomorrows revenues.

Option 3 is only useful if you can earn more outside of your business or career. And if you find yourself, after careful consideration, investing far more externally than internally - then maybe its time to reconsider your business model.