It’s the time of year when many agency owners start thinking about their fourth quarter tax planning strategy, which typically involves pre-paying for 2022 expenses or buying a bunch of things they may or may not need.

But what if you thought differently this year and looked for ways to invest versus spending?

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Hey everybody, Drew McLellan here from Agency Management Institute. This week coming to you from Westminster, Colorado. I’ve been talking to a lot of agency owners as we are approaching and now into the 4th quarter about year-end planning. And every year in early December, I have agency owners call me and go, “I’m in trouble, I’ve got a lot of money, I’ve got to spend it by the end of the month, and otherwise I’m going to pay tax on it.” Do not put yourself in that bind, be thinking now, running your financials right now, and really projecting out where you’re going to be at the end of the year, and be thinking about where can you invest? So, investing is different than spending. Spending is, I’m going to buy more copier paper, I’m going to pay my rent out a couple of months, I’m going to just prepay some bills, I’m going to buy a new car, right? That’s different than investing. Investing is, I’m going to take this extra money and I’m going to spend it in a way that it makes me more money. And that may be on people, that may be on training for your people, that might be on an acquisition, it might be on a new piece of software that you really need to learn, it might be about taking on some AI courses and applying that to your business. But I want you to think differently as you go into this 4th quarter about the excess money that you have, assuming that you’re having a great year, which many of you are, and I want you to ask yourself, where should I be investing? Is this the time to double down on a team member? Is this a time to expand staff? Maybe we are sort of, we’re awfully busy, but we actually, if we had one more person, that would lighten everybody’s load, and maybe if we could hire a certain skill set that we’ve been contracting out, maybe that would be beneficial. So be thinking about what you could buy, what you could invest in, in the 4th quarter of 2021, that would pay dividends in 2022 and beyond. That’s how I want you to be looking at your finances this last quarter. And don’t wait until December 1st, because those are not small decisions. Those are big decisions, and I want you to have plenty of room to make them. So, run your numbers, do some projections, and then think about where you could invest over the next 3 months that’ll pay huge dividends in 2022, and put your money there. Don’t buy more stuff you don’t need, don’t prepay bills. If you have excess money after that, sure do that. But all you’re doing, is then creating a new problem for yourself in 2022 because you’re paying less in 2022. I’d much rather see you invest those dollars wisely in something that will expand what you offer, or enhance a team member, or open new doors that perhaps you can’t open today. Be thinking investment, not spending. All right, I’ll see you next week.

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