Tim Frey explains a common misconception among business owners: gross earnings are not equal to personal take-home pay. He emphasizes that business revenue is subject to taxes and obligations, and that business owners should treat themselves as employees who pay themselves a wage and benefits rather than assuming all earnings are personal income.
Yes, you can make a lot of money in business, but it's not the way you think. Really. Where this goes wrong is they assume that everything they earn is theirs. Okay? And that's where it gets nasty, because you start getting tax bills, you start getting attached to the money, you start thinking, you know, the 50k a month you earn is yours in your pocket. And that's where it gets very dangerous, and they get very hurt about it. Just because we earn $100 doesn't mean we get to keep $100. So we are actually employees of our company. So we get paid a wage. We get paid Super. We get paid all that stuff. So how much we pay ourselves, which you skirt it around. We pay ourselves.
