When to Cash Out (Part 4)

Warren Buffett is one of the richest men in the world. Back in his high school days, he and a friend bought a pinball machine and placed it in a barber shop. With the profits from that, they purchased additional machines and placed them in other barber shops. They eventually sold that venture when they had machines in eight (8) barber shops. Warren Buffet took his share and used it to purchase stocks and other businesses. I believe his friend spent his share on a car or other gizmos. Three guesses which one made the “correct” decision.

Warren Buffett learned early that the concept of “reinvesting your profits” is the key to business success. Rather than withdraw profits, use the profits to expand your business. If you study successful businessmen, you will find this common thread.

So how does this apply to you? You need to decide how big you wish to grow your business and how soon you wish to see some of that money that your bot is making.

First off, you need to plan for this. How big do you wish to grow? How many bots do you wish to have? The answer to this will depend on your desire, the amount of time you can devote to maintaining the bots, available hardware and how long you can wait until you need to cash out.

This is not a trivial decision. While you can always change your decision later on, setting your sights too small can stifle growth and setting your sights too high can be discouraging is the growth is too slow or if you lose focus on the pull of instant gratification (cashing out) or delayed gratification (Reinvesting profits.)

Next time we'll apply these principles to a specific example, namely me.