Wealth Creation – Rule 9 (Plough Back Profit)

Wealth Creation – Rule 9 (Plough Back Profit)

If your must create wealth then you should plough back your profit.

To plough back your profit into your business simply means to reinvest your profit into your business in order to improve  it. The purpose of ploughing back your profit is to encourage business expansion. It is an error for you to squander your

profit if you must create tangible wealth. Some people even eat up their profit as well as their capital. If you do so, how can you create wealth? Wealth like I said before  is not something that is built overnight. It is gradual and step-wise. It grows with time. Imagine I made a profit of $100 and decided to eat it up, how can I expand my investment? The success of  business ventures in the world today is tied to the ability of their owners to reinvest their profits.

Sometime ago, I read from the internet that the likes of the founder of facebook.com  (Mark Zuckerberg) earns or pays himself  $1. This is contrary to the fact that facebook is worth billion of dollars.

At first I doubted but little did I realize that the profits are directly or indirectly being ploughed back expansion purposes. The saying that you cannot eat your cake and have it back is true. The success of your business depends on how you tackle it. Just imagine that you own a seed that is about to go on extinction. Then you planted that seed and you have 10 seeds and then out of hunger and ignorance you ate the 10seeds. How can you prevent such seed from being extincted? Practically you are worst of than the extinction  because you are aware that the seed is the last of its kind yet you went ahead to consume the 10 seeds. For someone who wants to create wealth it is important that your don’t eat up both your profit and capital.

Food for thought: “Wealth creation gain expansion when profit are ploughed back”.

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