Stop thinking of yourself as an employee. Even if you work 9-to-5 for someone else, you are actually a small business owner.
You are the CEO of You, Inc.
When we look at your finances through this lens, your bank account stops looking like a “budget” and starts looking like a Profit & Loss (P&L) statement.
Here is how a business—and your household—actually works:
1. The Top Line (Revenue)
This is your paycheck.
Most people obsess over this number. They think a higher salary equals wealth. But in business, we know that Revenue $\neq$ Profit. You can make $500k a year (high revenue) and still be broke (insolvent) if your costs are too high.
2. Cost of Goods Sold (COGS)
In a factory, this is the cost of the raw materials needed to make the product.
In You, Inc., this is the cost of keeping you alive and employable.
- Rent/Mortgage (Factory floor)
- Groceries (Fuel)
- Insurance/Utilities (Operations)
These are non-negotiable. You have to pay these just to keep the lights on and the business running.
3. SG&A (Selling, General & Administrative)
In the corporate world, this is the overhead—the marketing, the business lunches, the perks.
For you, this is the Lifestyle.
- Dining out
- Netflix & Spotify
- Travel
- The nicer car
These are the “nice-to-haves.” They make the business of living more enjoyable, but strictly speaking, the business could survive without them.
4. The Bottom Line (Net Profit)
This is whatever trickles through after the COGS and SG&A are paid.
In personal finance, we call this “Savings” or “Investments.”
The Financial Zen Takeaway:
Most people run their lives like a bad startup: High revenue, massive bloat in SG&A, and zero profit at the bottom.
Your goal as the CEO of You, Inc. isn’t just to increase the Top Line (though that helps). Your goal is to manage your margins.
If you make $100k and spend $100k, your business has a 0% Profit Margin. You are breaking even.
If you make $100k and keep $20k, you have a 20% Profit Margin. That is a healthy, investable business.
Audit your P&L this week.
Are you running a profitable enterprise, or are you just churning revenue?