What Are The Very Best Decisions For Your Business As Of Today?

In this video, Jonathan shares how to change your thinking to make better decisions for your business.

Hey! This past weekend I had a conversation with one of my really great friends. He is a long time friend that I’ve known since the first grade and he’s launching his first company in the medical industry and this is a guy that’s done his time. He knows his craft. He’s very talented. Not only that, he’s been very savvy with his money. He’s debt free. He’s saved his money. He’s been frugal. He has all the makings of a very successful business owner and I’m positive that he’s going to do very well so, we’re talking about his business and it’s a very capital intensive business to get started.

Unfortunately, years back before the 2008 downturn, he bought a really fantastic piece of property to build his dream home on. Then the market tanked and they didn’t develop that neighborhood so the value of this land collapsed. It made no sense to sell that land so, he paid it off and held the land in hopes that it would appreciate and come back in value. Today, that land is back, let’s say 50%, meaning it was up here, it lost a tremendous amount of value and now it’s like half way back to where he originally purchased it. We were talking and I mentioned, “Why don’t you go ahead and sell that land, get the money out of it, take that money and put it into your business?”

This is the point I want to make. I think it’s counter-intuitive for many of us to do such a thing. What we want to do is, if we make a bad investment, whether it’s a stock, a commercial property, or maybe we buy our personal residence. Maybe we even invest in an employee. We have training dollars in them. We have time. We have years in this person or this thing and this investment is under-performing and we want that thing to get back to where it originally was. Really a better example that the employee example is some piece of equipment or real estate or stock, as I said.

Let’s go back to the land and let’s just make up a number. Let’s imagine that he bought that for one hundred thousand, it collapsed down to twenty thousand, it’s now back up to fifty. Where could he make the money back the fastest? That is the real question because the way I believe you need to look at investments, the way you need to look at money is, who cares what happened in the past. That was yesterday. It doesn’t matter. Where are we today? What is my next best step moving forward? As of today, forgetting everything that’s happened in the past, based on the mistakes I’ve made, the bad investments. Who cares what I paid for it? Where are we today? Looking forward out into the future based on the economic conditions, the opportunities, my knowledge, my company’s skill set and team. Where could we best invest this money?

I believe he’s going to be very successful in his business. This business is going to set up his family. It’s going to let him do what he wants to do. Everything about that’s fantastic so, I would argue that taking this money out of the land and not waiting X number of additional years for it to get back to that original price and putting that money into his business to help him grow that business is a better use of the money. I’d argue that he’ll make his money back so, in my fictitious example of still being down fifty thousand bucks, I’d argue that he will make that fifty thousand dollars back faster in his business than he will leaving it in the land and hoping that, in the next three or four years, it’ll appreciate back to the original value.

Again, that’s the point. Based on where you are today, forgetting all past mistakes, forgetting what you originally spent on something, with that thing you now own or the money that it’s worth, where could it best be used? Where could you make back your losses? Not sitting in a stock, hoping that someday it will come back so you can sell at that time. Where can you get that or where can you best make your money back? Where can you best use your money? Maybe making the money back isn’t even the best way to talk about it. Where could you best utilize that asset, that money, the team to bring you the greatest return in the future, forgetting the past? That’s really the key here. We want to think about every day as a new day. It’s kind of like a zero sum game. We’re starting over from scratch based on today, looking out into the future. We make our decisions based on where we are today, forgetting everything in the past.

Over and over and over again, I see so many of us thinking about what happened in the past, complaining about what happened in the past, feeling guilty for what happened in the past. That doesn’t matter. It’s from today forward. What’s your very best decision based on where you’re today. It’s all you’ve got to worry about.