The Profit Account in the Profit First system is duel-purpose.
The first purpose is to use half of the account as an ever-increasing emergency fund.
The second purpose is pay out a bonus to the business owner each quarter. Just as corporations pay their owners distributions each quarter, your business will be rewarding you each quarter with the Profit Account. This money is a bonus. This means it should be used for something enjoyable and not “business investment”. As a business owner, you’re taking quite a bit of risk, this risk and hard work should be rewarded and incentivized and this is part of the purpose in this account.
What will you spend your Profit Distribution on? Personally, I prefer Scotch, soccer jerseys, and or vacations!