Conquita Cadet: Predictable Profit and Net Profit Allocation

Concepts of Enough and Abundance

Kantina defines the opposite of scarcity as enough, while abundance is more than enough. The government budgets enough at $\$6,000$ a year for every US household, though Conquita suggests it is closer to $\$8,500$. Abundance consists of the money remaining after satisfying all personal, lifestyle, intellectual, and spiritual needs, including food, rent, medical expenses, and savings for the future. Individuals define what enough constitutes for themselves.

Five Phases of the Work Life

The Conquita version of the financial lifetime involves five phases: learn, earn, turn, return, and burn. These move from basic skill acquisition and saving in a piggy bank during the learn phase to questioning identity and career in the earn phase. The turn phase focuses on skill improvement, while the return phase seeks the most beneficial return on investment. Finally, in the burn phase, individuals recognize they have enough and pursuit personal desires at any cost.

Net Profit and Net Income Definitions

In contrast to systems like QuickBooks which use the term net income, Conquita distinguishes between net profit as corporate and net income as personal. Net profit is the amount remaining after all business expenses are deducted. Net income is the pre-tax household expense of the owner as they define it, essentially representing enough. The business net profit goal should be calculated by multiplying the owner's required net income by $4$.

Budgeting Net Profit into Four Parts

In Kankita, net profit is budgeted into four equal parts of $25\%$ each: reinvestment into the business, retained earnings for working capital and debt reduction, corporate taxes, and shareholder distribution for personal net income. These categories are further split into short-term (current, $1$ to $12$ months) and long-term (term, thirteen months or more) budgets, each representing $12.5\%$ of net profit to maintain financial balance.

Reinvestment and Retained Earnings Protocols

Rules in Kankita state that monthly reinvestment must not exceed $25\%$ total. Short-term reinvestments ($12.5$ of the $25\%$) cover first-time expenses like new website design or hire training to grow the company within the year. Long-term reinvestments ($12.5\%$) handle monthly payments for assets like vehicles or machinery. Retained earnings provide safety against economic or social changes by maintaining one month of working capital and reducing $12$ types of debt.

Taxation and Shareholder Distribution

A $25\%$ budget is reserved for federal and state corporate taxes, with equal deposits made on $\text{January } 15$, $\text{April } 15$, $\text{June } 15$, and $\text{September } 15$. Shareholder distribution is the owner's net income for current and future needs. Any unspent funds from the previous month's short-term and long-term net profit budgets are added to the current shareholder distribution, provided necessary working capital is maintained.

Core Financial Takeaways

The Punkeena strategy relies on three main takeaways. First, net profit satisfies four primary purposes capped at $25\%$ each. Second, each purpose is divided into two sub-budgets of $12.5\%$ each. Third, the company net profit goal is found by multiplying the owner's desired monthly pre-tax net income by $4$.