The first time I paid myself a real salary, I felt guilty. That thinking is completely backwards. An owner’s salary is part of a healthy P&L, not a luxury you feel bad about. If you’re paying yourself next to nothing and just taking distributions, you don’t actually know how healthy your company is. If someone bought your business tomorrow, they’d have to hire a replacement at market rate. Pay yourself that number. Otherwise your numbers are lying to you.
@officialchadpetermanTranscript
The first time I paid myself a real salary, I felt extremely guilty. Here's why that thinking is backwards. An owner salary is part of a healthy P&L. If you're paying yourself very little to nothing and simply taking distributions, how healthy really is your company? If you were to sell that company, the people that buy it are gonna have to bring in someone to run it and they're probably going to pay them at market rate based on the size of your company. Include that. Yes, there are tax considerations, but think about what health looks like in your company. If you're paying all of those that are running it, whether it's a family, husband, wife, whatever it may be, make sure that they're compensated according to market rate so that you can truly understand how healthy your company really is.
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