How does someone decide how much they should pay themselves to live on?. Is there a special formula for breaking it down? Exampe: If I am a sole proprieter with no employees. How much should I keep aside to pay taxes,reinvest,hire a cpa, and live on?
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For a solo guy like myself with pretty low overheard and the infruastructure of the business built and paid for.
Moving Forward…
20k for saving
30k for bills
20k for operations
15k for fun money
I gotta make 85k to break even with my goals. Anything more goes to more savings.
That’s my round about.
You may have different goals in mind.
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Very impressive!
Set up two accounts. One business. One personal. Divide your income 60/40 you/business. Separate the money right away.
It makes advancing much easier for myself if I know what money goes where. Reaching goals is not easy but when your building a business you need to set reasonable and reachable goals.
I’m sure this thread is going to take off. I’m curious to see what @Bruce has to say on the subject.
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He has a lot of great responses about this topic and the COOL thing it’s all searchable, man this forum rocks!! 
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60/40 is easy enough. Just the kind of answer I was looking for
would highly recommend reading profit first to figure out the perfect balance of paying expenses for your business and compensating yourself
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I will do
you don’t happen to have a copy I could bum off you do ya? Lol
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It must be a good book. Alot of people left positive reviews on amazon
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Profits < 20%
Labor > 25%
Bus = 30%
Accruals = 15%
Gives 10% flex.
I just read a bit of that book and really like the concept.
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When you say LABOR are you referring to paying employees?
Yes
Hey guys check out this great thread on this topic (plenty of insight.)
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You are an employee, pay yourself as such.
Thanks, that chart is extremely helpful. I appreciate that
I find this subject pretty interesting. I am a bit surprised though, that more of you aren’t being direct with how you do this. Particularly the solo crowd.
Honestly, I wonder if this subject isn’t the major reason most don’t make it 5 years.
I do not need much. Live pretty simply and cut much of waste a few years back.
I take a set amount which provides what I need. I like keeping money in the business for “oh shit” days or seasons.
End of the year look at the money left and take what I feel comfortable with as a bonus.
Better questions may be do people get “paychecks” or “draws/distributions”
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I posted a link up above that people shared how they break things down into %.
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