My point is, for most financial information, talking in absolute dollar terms is pointless as there is no relativity. The figures need to be related to some other measure. What I have discovered is that using time instead of absolute dollars is the best measure when gauging an issue. From, how much should I pay for this business?, to, how much cash should my business retain?
The reason why time is such a powerful measure is because everyone has 24 hours in a day. And you know how long it takes to generate your level of income in any given time frame.
The Espresso Shot: Instead of saying you have $x dollars in the bank, express it in terms of how many months of expenses the cash covers. I can assure you, your idea of money will evolve for the better.
1 comment:
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