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Module: 1. AAU Agency/Module 1 - Mindset Tracking 10
Lesson: 07. Salary
Duration: 05:11
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--- TIMESTAMPS ---
[00:00 -> 00:07] Alright, this is going to be a very short lesson, but it's absolutely necessary and that's why I wanted to put it out on its own.
[00:07 -> 00:11] And it comes down to salary and paying yourself.
[00:11 -> 00:18] One of the most important things you need to realize is you're going to be putting a lot of time and money into this business.
[00:18 -> 00:21] You need to get something out of it.
[00:21 -> 00:28] And I don't mean just the warm fuzzy feeling of owning your own business and working out on your own.
[00:28 -> 00:32] Because that doesn't mean anything unless you're able to bring in some money.
[00:32 -> 00:37] If we're not bringing in money with a business, then why are we doing it?
[00:37 -> 00:40] You need to pay yourself a salary.
[00:40 -> 00:49] So each and every month, when you start looking or every couple of weeks, when you start looking at your numbers, the one thing you need to do is you need to pay yourself first.
[00:49 -> 00:52] And yes, the majority of this is psychological.
[00:52 -> 01:00] Of course, there's a monetary reason for it so that you're bringing something in for the hard work that you're doing in your business.
[01:00 -> 01:03] But there is a big psychological aspect to it.
[01:03 -> 01:13] It's just like if you go to your corporate job for 40 hours a week and you come home at the end of the week and you don't get paid, why are you doing that job?
[01:13 -> 01:14] This is a job.
[01:14 -> 01:20] It's just a job that hopefully you're going to enjoy more than any other job that you have.
[01:20 -> 01:24] But with that said, you've got to bring some money home out of it.
[01:24 -> 01:27] And you might be like, well, how do you figure out what to pay yourself?
[01:27 -> 01:29] That's really up to you.
[01:29 -> 01:32] But here's what's going to happen if you don't pay yourself.
[01:32 -> 01:35] And the only reason I know this is because I've done this.
[01:35 -> 01:39] I fell into this trap and I know a lot of other business owners that have.
[01:39 -> 01:43] You will sit here and say, okay, you know what, I'm just getting started.
[01:43 -> 01:49] So, you know, I've got some money in savings, but I'll just, I'm not going to pay myself this month.
[01:49 -> 01:51] I'll do it next month.
[01:51 -> 01:52] Guess what?
[01:52 -> 01:54] You're probably not going to pay yourself next month.
[01:54 -> 01:58] And if you are, it's going to be not very much.
[01:58 -> 02:03] Or you're just going to take out exactly what you need to buy dinner for yourself.
[02:03 -> 02:04] That's it.
[02:04 -> 02:11] I've fallen into that trap because I was in the situation that my wife, she did very well as far as her work.
[02:11 -> 02:18] So, I had the ability that I didn't have to bring home the money to support the whole entire family.
[02:18 -> 02:22] But what I did with that was I basically put every dime back into the business.
[02:22 -> 02:24] Big mistake.
[02:24 -> 02:26] I worked for years like that.
[02:26 -> 02:31] And so at the end of the year, I'm like, how did I work all that time and I made so little money?
[02:31 -> 02:33] Because I didn't pay myself first.
[02:33 -> 02:38] And what ends up happening is you put that money back into your business if you don't pay yourself.
[02:38 -> 02:44] And a lot of the time, you end up wasting it because you're using, you spend it on things that you maybe don't need.
[02:44 -> 02:47] You come first.
[02:47 -> 02:54] So, I did it at one point when I started doing it was I'm like, okay, I'm going to take out 15%.
[02:54 -> 02:58] Now, that doesn't sound like a lot, but I had an e-commerce business that was doing quite well.
[02:58 -> 03:04] And I said, all right, I'm going to take out 15% and I'm going to pay myself every two weeks.
[03:04 -> 03:05] So, how did I do that?
[03:05 -> 03:07] I started writing myself a check.
[03:07 -> 03:10] I would write myself a check out of the business every two weeks.
[03:10 -> 03:14] Obviously, I keep track of it in my expenses because I need to make sure I pay taxes on that.
[03:14 -> 03:22] Then I ended up hiring one of those payroll agencies where they take the taxes out for you.
[03:22 -> 03:26] What I ended up working, what actually works better is I just keep track of it.
[03:26 -> 03:32] And then when I meet with my accountant, I tell him how much I paid myself and he works the taxes out then.
[03:32 -> 03:35] But it's really up to you on how you do it.
[03:35 -> 03:37] You just got to keep track of it.
[03:37 -> 03:40] Then, so I pay myself a certain amount.
[03:40 -> 03:42] I do it every month.
[03:42 -> 03:43] That's just fine by me.
[03:43 -> 03:46] I don't need to get paid multiple times.
[03:46 -> 03:49] I just budget it better.
[03:49 -> 03:51] So, I pay myself once a month.
[03:51 -> 03:53] You might do it once a week.
[03:53 -> 03:54] You might do it twice a month.
[03:54 -> 03:56] It's really up to you.
[03:56 -> 03:57] But pay yourself.
[03:57 -> 03:59] So, I pay myself once a month.
[03:59 -> 04:05] And then, there might be a couple times a year where I look at, wow, we've had a couple of really good months.
[04:05 -> 04:07] I'm going to bonus myself.
[04:07 -> 04:09] And I'll write myself a bonus check.
[04:09 -> 04:14] Once again, I keep track of everything so I know exactly how much I need to pay in taxes.
[04:14 -> 04:16] But I'll bonus myself.
[04:16 -> 04:19] Maybe I'll wait till maybe it's every three months.
[04:19 -> 04:21] Sometimes I wait till the end of the year.
[04:21 -> 04:25] Right now, I've been bonus myself in the last few months.
[04:25 -> 04:28] And at the end of the year, I'm going to take a bigger bonus.
[04:28 -> 04:30] It really doesn't matter.
[04:30 -> 04:32] But you need to get something out of it.
[04:32 -> 04:34] I don't enjoy working for free.
[04:34 -> 04:35] Nobody does.
[04:35 -> 04:40] But if you are not paying yourself, you are essentially working for free.
[04:40 -> 04:42] Are you going to enjoy your business as much?
[04:42 -> 04:43] No.
[04:43 -> 04:49] Are you going to want to get up and go to work each and every day and feel like you're getting anything out of it?
[04:49 -> 04:56] You might be getting that warm fuzzy feeling, but until you're getting a paycheck, it's really not a business, is it?
[04:56 -> 05:00] So, I know I spent too much time on this already, but make sure you pay yourself.
[05:00 -> 05:01] It might be $50.
[05:01 -> 05:03] It might be $100.
[05:03 -> 05:09] Just make sure you pay yourself every single month at a minimum.
[05:09 -> 05:11] Alright? See you in the next video.

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--- FULL TRANSCRIPT ---
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Alright, this is going to be a very short lesson, but it's absolutely necessary and that's why I wanted to put it out on its own. And it comes down to salary and paying yourself. One of the most important things you need to realize is you're going to be putting a lot of time and money into this business. You need to get something out of it. And I don't mean just the warm fuzzy feeling of owning your own business and working out on your own. Because that doesn't mean anything unless you're able to bring in some money. If we're not bringing in money with a business, then why are we doing it? You need to pay yourself a salary. So each and every month, when you start looking or every couple of weeks, when you start looking at your numbers, the one thing you need to do is you need to pay yourself first. And yes, the majority of this is psychological. Of course, there's a monetary reason for it so that you're bringing something in for the hard work that you're doing in your business. But there is a big psychological aspect to it. It's just like if you go to your corporate job for 40 hours a week and you come home at the end of the week and you don't get paid, why are you doing that job? This is a job. It's just a job that hopefully you're going to enjoy more than any other job that you have. But with that said, you've got to bring some money home out of it. And you might be like, well, how do you figure out what to pay yourself? That's really up to you. But here's what's going to happen if you don't pay yourself. And the only reason I know this is because I've done this. I fell into this trap and I know a lot of other business owners that have. You will sit here and say, okay, you know what, I'm just getting started. So, you know, I've got some money in savings, but I'll just, I'm not going to pay myself this month. I'll do it next month. Guess what? You're probably not going to pay yourself next month. And if you are, it's going to be not very much. Or you're just going to take out exactly what you need to buy dinner for yourself. That's it. I've fallen into that trap because I was in the situation that my wife, she did very well as far as her work. So, I had the ability that I didn't have to bring home the money to support the whole entire family. But what I did with that was I basically put every dime back into the business. Big mistake. I worked for years like that. And so at the end of the year, I'm like, how did I work all that time and I made so little money? Because I didn't pay myself first. And what ends up happening is you put that money back into your business if you don't pay yourself. And a lot of the time, you end up wasting it because you're using, you spend it on things that you maybe don't need. You come first. So, I did it at one point when I started doing it was I'm like, okay, I'm going to take out 15%. Now, that doesn't sound like a lot, but I had an e-commerce business that was doing quite well. And I said, all right, I'm going to take out 15% and I'm going to pay myself every two weeks. So, how did I do that? I started writing myself a check. I would write myself a check out of the business every two weeks. Obviously, I keep track of it in my expenses because I need to make sure I pay taxes on that. Then I ended up hiring one of those payroll agencies where they take the taxes out for you. What I ended up working, what actually works better is I just keep track of it. And then when I meet with my accountant, I tell him how much I paid myself and he works the taxes out then. But it's really up to you on how you do it. You just got to keep track of it. Then, so I pay myself a certain amount. I do it every month. That's just fine by me. I don't need to get paid multiple times. I just budget it better. So, I pay myself once a month. You might do it once a week. You might do it twice a month. It's really up to you. But pay yourself. So, I pay myself once a month. And then, there might be a couple times a year where I look at, wow, we've had a couple of really good months. I'm going to bonus myself. And I'll write myself a bonus check. Once again, I keep track of everything so I know exactly how much I need to pay in taxes. But I'll bonus myself. Maybe I'll wait till maybe it's every three months. Sometimes I wait till the end of the year. Right now, I've been bonus myself in the last few months. And at the end of the year, I'm going to take a bigger bonus. It really doesn't matter. But you need to get something out of it. I don't enjoy working for free. Nobody does. But if you are not paying yourself, you are essentially working for free. Are you going to enjoy your business as much? No. Are you going to want to get up and go to work each and every day and feel like you're getting anything out of it? You might be getting that warm fuzzy feeling, but until you're getting a paycheck, it's really not a business, is it? So, I know I spent too much time on this already, but make sure you pay yourself. It might be $50. It might be $100. Just make sure you pay yourself every single month at a minimum. Alright? See you in the next video.

