BiggerPockets Business Podcast 97: Put Profit First: How to Compound Your Business and Personal Income with Rocky Lalvani

Rocky Lalvani came to the United States as a small child. Like many immigrants, Rocky’s parents arrived with a small amount of money, around $25. As hard workers, they were consistently talking to their friends and relatives about how to make more money so they could have the coveted “American Dream”. This is how Rocky started his education in money and finances, and what pushed him to become wealthy. Now, Rocky teaches businesses and entrepreneurs the Profit First system, which is exactly what it sounds like. A business usually calculates profits as sales - expenses = profits. Rocky argues that this is an inefficient way to see your true profit, and what the actual calculation should be is sales - profit = expenses. You may be asking how to minimize expenses so the above formula can work. The solution to this isn’t that you need to manipulate the numbers so your expenses equal the difference between your sales and your profit, but that you need to minimize your expenses when possible. But what about fixed costs? What about startup costs? As Rocky puts it, you need to have a customer before you start having expenses, something businesses rarely realize is not only possible, but profitable. Rocky also goes into his #1 tip for accumulating wealth and dives deep into why the phrase “the rich get richer” tends to be true. He also goes into how businesses can allocate their profits correctly, have the accurate amount for taxes, and pay themselves first so they’re making money while their money makes money! ... show more