Owner's pay is your salary; profit is what's left over, the icing on the cake. Take up to 50% of quarterly profit as distributions, or use up to 99% monthly to crush consumer debt. The rest stays in the profit account.
What's the difference between owner's pay and profit? I always get asked that question, so I'm just going to head it off here. Profit is the icing on the cake. It is the reward for you for having a profitable business, for trading 40 hours working for someone else to 80 hours working for yourself. It's the late nights, it's the blood, sweat, tears, it's that making sure that you are getting a return on the investment of your business, of starting it. So there's two functions though of the profit account. One is to take up to 50% out of that account every single quarter and do whatever the heck you want with it, because that is your the money. The second function though of that profit account is to wipe out debt that is keeping you up at night. If you have debt, bad debt, consumer debt, whatever it might be, that's just like, oh my gosh, I got to get this off my plate, use up to 99% of that on a monthly basis, the profit account, to start just hammering that debt down so that way you can get that out of your life. And then every dollar, once that's all done, goes back into the profit account.
Why Traditional Wholesaling Keeps Failing You (Use This Pre-Flip Method Instead)
