Surplus Capital - How I Invested $500k+
What should you do when money accumulates in your business bank account? You have several ways to spend it - each depends on what kind of risk you're prepared to tolerate.
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A few years ago, before he became a Netflix superstar 🤯, I was having coffee with Ramit Sethi in NYC and told him of a pleasant problem.
I was accumulating money in my business bank account and didn’t know what to do with it.
By this point, I had around £500k ($635k) in the business account.
The options were pretty simple:
I could do nothing. I could leave the money where it was. The upside is that it would also be instantly accessible if I needed it, and I wasn’t putting any of it at risk. The downside is that inflation would steadily chip away at it, and it wasn’t doing anything to help me grow my business.
I could pay the money to myself by either increasing my salary or issuing a large dividend. The upside is that the money would go directly into my bank account for personal use. The downside is that the taxes would be significant. …
