Breaking Even

The term “breaking-even” refers to an individual or business who has taken a financial risk, and managed to make back enough money to be right back where they started. Say it costs a business owner $50,000 to start their small business, and over the course of a quarter or a year, the owner makes back $50,000. The owner of this business has broken-even, meaning though he or she hasn’t lost any money from their endeavor, they have not made any profit from it either. It is not necessarily a good thing for someone to break-even depending on the circumstance. In a short term perspective, it may be a good thing as it could be a sign that one is on the right track to make a lot of money if they have broken-even fast enough. If it takes a long time for a business to break-even, though, it may mean that the business is failing or will not find much more success in the future. From an individual standpoint, it may not be as detrimental. For instance, if someone were to spend $20 on a lottery ticket and end up winning $20 from that ticket, it doesn’t hurt the individual in the slightest and it is as if the ticket was never bought in the first place.

Generally it is not in one’s best interest to break-even. Everyone wants to make money, and to break-even means you have put some sort of financial investment into something with the hopes of making more money from doing so, and at the very least have made your money back and haven’t taken a major loss. Breaking-even could be viewed as a failed endeavor, a dodged bullet, or a sign of future success depending on the situation the person may be in. In the end though, everyone must break-even at some point in order to make a profit in a given situation.