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 Post subject: What to do with "Leftover" Capital
PostPosted: Thu Oct 25, 2012 10:30 am 

Joined: Fri Jun 22, 2007 10:40 am
Posts: 35
Location: Longview, TX
Now that the forum has helped me with my retirement fund situation, I have another question to present.

I'm a small business owner and my doors have been open for for almost two years. Business isn't booming, but it's healthy and turning a profit. We have a good portion of our initial capital investment remaining and currently sitting in our business checking account.

So my question is, how can I put that money to work for us while also maintaining fluidity in case...?

For discussion purposes, let's say I'm working with $5,000-$10,000.

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 Post subject: Re: What to do with "Leftover" Capital
PostPosted: Thu Oct 25, 2012 11:02 am 

Joined: Fri May 04, 2012 2:23 pm
Posts: 810
vanderbilt79 wrote:
Now that the forum has helped me with my retirement fund situation, I have another question to present.

I'm a small business owner and my doors have been open for for almost two years. Business isn't booming, but it's healthy and turning a profit. We have a good portion of our initial capital investment remaining and currently sitting in our business checking account.

So my question is, how can I put that money to work for us while also maintaining fluidity in case...?

For discussion purposes, let's say I'm working with $5,000-$10,000.


Questions:

1) You say you are profitable, what's your salary from the small business?
2) What does business school 101 say about cash?
3) Are you asking a bunch random people on the internet who know nothing about you or your business how to invest this money? Should you, as a business owner, know how to reinvest this back into the business? Or are you asking about a high yield savings?

$5k to $10k is peanuts. I'd leave it in the checking account if I was a small business owner.

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"If you only have 1 year to live, move to Penn...as it will seem like an eternity."


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 Post subject: Re: What to do with "Leftover" Capital
PostPosted: Thu Oct 25, 2012 11:14 am 
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Joined: Wed Sep 23, 2009 9:01 am
Posts: 5398
You need to better define for yourself what the cash is. If it is working capital that you don't happen to need now then it should be in a safe place without concern for interest earnings - a money market account or a bank account. Its purpose is not to produce income. Its purpose is to be there if you need it.

Hopefully you have an operating plan with future cash flows forecast out at least a year.


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