Owners of businesses draw a firm line between two shades of money.
Operating money is essential to keeping the business going now. In a little tuck shop, it pays for stock, rent and the other costs of staying open.
Capital money is set aside for the future. If expansion is planned, it might be a reserve for employing extra staff. If an essential vehicle will need replacing in two years, the money for that belongs in the capital pot.
Is there an equivalent distinction for those of us not running businesses?
I’ve never run a business. But looking back, I realise I had an eye on the future.
I always had life insurance. I provided for retirement. I insured my debts – especially a house bond and car finance. Funeral insurance was different: I took a chance on that, getting it only after I retired, 14 years ago.
I’m here. So, I must have had operating money.
But setting aside capital money – money for the future? Let’s not overlook that.
Whether you’re in the business of managing a business – or simply managing a salary.
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