How do you pay yourself ?

Question

Question so once you complete a flip or are collecting monthly rent, what percentage of money do you take out for your personal bills , groceries , gas , clothes , your wife's Pandora charms LOL ?

Craig Jeppesen · Answer

I don’t take anything out but keep it in savings until it is time for the next investment purchase. That is how you use compound interest as you keep investing your earnings. I will do this until I retire.

John Teachout · Answer

We live on our rental income. We take out expenses such as insurance, taxes, etc and those automatically deposit into a designated account. We have a portion that automatically goes into a capex/maintenance account. Our "cash flow" is income available to spend. We try to live on less than what we make as we always have. We transfer funds as required to pay bills, credit cards, income taxes, etc.

Michael Sharpe · Answer

@Jeff Cagle See Jeff !! That was the mentality I was going off of ! But reading other perspectives on this thread has made me think twice !

Jeff C. · Answer

Given that I'm a full time investor with no other job, $0.00 isn't quite going to get me by!  The IRS requires that as an S corp employee I pay myself a "reasonable salary". This is on auto deposit monthly. Beyond that I take profit distributions when necessary.

Justin A. · Answer

@Jeff Cagle Please check your PM

James Galla · Answer

$0.00. Your partner should be on board with the business and it should all get reinvested for the most part. Perhaps no more than a few hundred gets used for personal purposes. More reinvestment means faster growth.

Clifford Paul · Answer

@Michael Sharpe

Same as @Craig Jeppesen we don't live on any of our rental income. We reinvest all that money into remolding properties, buying properties and paying off properties.

How do you pay yourself ?

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