Technology

I have a little pet theory I've been stewing about when it comes to penny wise/pound foolish decisions from business owners of all types. From landlords, to local cafes, and all the way up to Fortune 500 CEOs. It comes down to bad accounting.

I've taken to setting aside money into buckets. There's a bucket that handles some filter replacements for our home furnace (it's a 5 inch thick HEPA filter, so it's bit pricey) and under sink RO system, for example. When it comes time to buy one, I just pull from that bucket. It doesn't feel like I'm losing anything off my usual budget for the month. The money is just there, and it feels nice to be able to pay without worry. It almost feels like a reward for good planning.

Companies do this, as well. In fact, I helped setup a similar system at my local community makerspace (which runs as a 501(c)3). We pay into buckets for things like insurance every month, and then we pay it when the bill comes due each year. Again, it doesn't feel like we're stressed for anything.

Not all companies do this, or if they do, they don't do it for everything. If you're not setting aside a little bucket for something that you know will come up, then it has to be paid out of your general funds. That's money you wanted to use for something more fun than furnace filters or insurance or a software package that can process navigation data automatically.

So when you see billionaires or landlords complain about something important being too expensive, it might be because they aren't tracking their accounting buckets properly. If this keeps happening, that's a good indication that they are anything but a glorious Captain of Industry.