Keeping the nut low

Several years ago, TV and movie star Jack Klugman was being interviewed on one of the prime time interview shows, when he was asked one of those "secret of your success" questions. It was after "Odd Couple" and "Quincy" had run their courses and Mr. Klugman was then considering retirement.

The question was, "What advice would you give to a newcomer, someone who is just entering the entertainment field?"

One might expect his answer to do something with polishing one's craft, or managing one's image, or where best to live and work. But it wasn't anything to do with learning, or style, or geography. It had to do with managing finances.

"My advice is simply to keep the nut low." Said Mr. Klugman. "Spend money as if you are never going to work again and you'll never be under pressure to take work you don't think will help your career."

That interview was a turning point for me. I saw the similarity between struggling actors waiting on tables to pay the rent and struggling entrepreneurs trying to hold on when the cash isn't flowing as well as the business plan projection said it would.

Many stars on the rise, and stars who have already risen, seem to spend as if success isn't cyclical. Ah, but it is. By and by, those who do not save for those Biblical lean years create their own little recipe for disaster.

I've learned to "keep the nut low" from my orneriest, stingiest clients -those whom I would expect to still negotiate the price of a life raft even as they are ankle deep in water on a sinking ship. On that experience, here's what to do:

1. Never buy it unless you can prove you absolutely need it. Successful companies do get things done without buying new computers and printers every three years.

2. Constantly test your buying assumptions. If you bought one and didn't turn a profit, and the second wasn't profitable, it's a good bet that the third isn't going to be better. Shut mistakes down quickly.

3. Check ALL your bills, even the ones you don't understand. 80% of all phone and utility bills, for instance, are reportedly incorrect. They aren't always in the vendor's favor, but they mostly are. I've seen overpayments of hundreds of thousands of dollars, because folks find complicated bills too, uh, complicated to analyze.

4. Check inventory by more than one person. I'm not saying that your warehouse is full of crooks, but remember President Reagan, who said, "Trust, but Verify."

Remember, a dollar saved is not just a dollar earned. It's your dollar earned. Tuck it away with all the other dollars saved and it will never be lonely.