Keeping the Money: Tracey Walker’s Six-Account Money System

You’ve watched it happen inside your own team, maybe inside your own bank account. Someone hits their best month ever, and eighteen months later they’re back to nothing, wondering how a business that was clearly working somehow stopped paying the bills it used to cover with room to spare.

Tracey Walker names this pattern early in her Unstoppable Mastermind session, and compares it directly to lottery winners who blow through a windfall in a few short years. The difference, as she points out, is that people in this business actually worked for the money. Losing it anyway isn’t bad luck. It’s a structure problem, and it has a specific fix.

As someone who’s had a strong month and still felt broke by the third week of it, you already know the sensation she’s describing. This session builds a real system for keeping commission money once it arrives, instead of watching it disappear into whichever bill happened to be loudest that week.

Why does one account for everything quietly wreck a business?

Tracey Walker’s diagnosis is blunt: most people running a home-based business have exactly one account, the one their commissions land in. Marketing gets paid from it. Travel gets paid from it. Personal expenses get paid from it. And because there’s only one number to look at, people manage their spending off the size of that single balance instead of what any of it is actually earmarked for.

Her fix is to split that single account into six separate business checking accounts, all tied to one tax ID number rather than a personal social security number: an operating account, a marketing account, a taxes account, a gifting account, a travel account, and a savings or fixed assets account. Every dollar of commission still lands in the operating account first, exactly like before. What changes is what happens next.

How do you split one paycheck six ways without doing math every time?

Instead of assigning fixed amounts to each account, Tracey Walker uses percentages, and she’s specific about why: dollar targets fall apart the moment a slow week doesn’t hit the number, and people get discouraged and abandon the system entirely. Percentages scale with whatever actually came in. Her working split keeps roughly 40% in operating to fund the business itself, with the remaining accounts drawing 20% for marketing, 10% for gifting, 10% for travel, and the rest split between taxes and savings depending on the individual.

Because when you’re in a business, your business should fund your business, okay? Your business should fund your business.

That line is the whole argument in miniature. The operating account exists so a slow month doesn’t mean missed hosting fees or a lapsed subscription, because the business has already set aside what it needs to keep running before anyone touches it for anything personal. Skip that step, and a single rough week turns into a compounding crisis, because you’re now trying to fund next month’s marketing and this month’s shortfall at the same time.

Why does keeping business and personal money separate matter this much?

The discipline underneath all six accounts is refusing to blend business funds with personal spending, what Tracey Walker calls commingling. As she puts it, “Money needs a manager, does it not?” Every dollar that moves without a clear business reason attached to it is a dollar an accountant, or an IRS auditor, can later question. Do it consistently enough and a legitimate business can lose its legal separation from its owner entirely, along with every deduction that separation was protecting.

A few pieces of the system worth setting up before your next commission check lands:

• Open separate checking accounts under a business tax ID, not your personal social security number.
• Assign each account a percentage of every deposit instead of a fixed dollar figure.
• Fund the operating account first, every time, before anything moves toward personal use.
• Keep documentation for anything that could be questioned as a legitimate business expense later.

None of this requires an accounting background to set up. It requires six trips to a teller window and the discipline to actually route money the way you decided to, instead of the way the loudest bill of the week demands.

Create your free account at empowernetwork.com/watch to watch Tracey Walker build out the full six-account system and download the audio.

The full session transcript follows below.

Transcript

This particular segment is about you keeping the money. The assumption is that you're making the money, okay? We'll go back and we'll talk about how to increase the money, but let's for now just assume that you've got all the money that you need, okay? You've gotta do something starting now to allow yourself to bring the money to you, right?

Money needs a manager, does it not? It needs a manager. And you have to be more loving with your money. You have to treat your money very, very nice, right?

And money will treat you nice. So here's a couple things that I've done. I learned, just so you guys know, I learned some of this stuff through a course that I took, 2011. This is before the company started.

This was like that summer. And I learned this from a gentleman named T. Harv Ecker. Anybody of you guys familiar with T.

Harv Ecker? Heard him before, okay. And I learned this concept from him, but it was really applied towards personal. Right?

It was applied towards personal. He calls it like the jar system or something like that. And I said, well, okay, that's cool, but really, how could this apply to business? How could I take this same concept and apply it to business and create this kind of web of how my money flows so that it works for me and I can see what's going on?

And that's kind of how I came up with this kind of spin on it, right? So I didn't come up with the idea of the jar system, but I came up with the concept of putting a spin on it for business owners. All right? For entrepreneurs.

And so the idea is so simple that you can really teach your kids, right? The idea is that if you had six different jars, literally a jar, all right, that you could teach your kids how to save their money according to the purpose by which the money is being saved. Okay? I think it's, there's a personal account.

There is a fun account. There is a expenses account. There is a gifting or charity account. Or I think they may have called, oh, education account.

I think it's called an education account. And then there's a what? A give account. Yeah, yeah, like a give, like a charity, something that you're going to give away, that type of account.

How many is that? Five. Five. And then there's some other account.

I can't remember what it is. It doesn't really matter. The point is I kind of took the concept and we put it into the business. What I found is that in the business, in the world of home-based business, nobody's really talking about this, right?

Nobody's really talking about this on a basic level. People are, you know, only being exposed to it if they've been to courses like I've been to, and if they know about it, they're not telling other people about it, right? I've been on other teams before. I've never heard anybody in my organization, in my upline, or sponsor, or anybody ever talk to me about this stuff.

It doesn't mean they don't know. It just means they have not opened up their mouth to share it with me. So I wanted to be different. I wanted to share this with people who I cared about, including you guys, so that you have a blueprint, right?

You have a blueprint. Now, whether you use a blueprint to build your house, that's on you, right? If you don't follow what the architect has put into play, then you might have a low beam somewhere it doesn't belong, right, and that might be a problem for you. But if you choose to follow the blueprint, I think that it can prove itself to be rewarding for you, and it can help you as you get going, and it makes things a lot seamless, a lot more seamless for you, right?

So let's just call this the money system from this standpoint, okay? There are six basic accounts. There are six basic accounts that we're going to still keep, all right? There are six basic accounts.

The first account is your operating account, okay? I'll go into all these and how they work. And it doesn't have to be in any particular order. They just come at the top of my head in this way.

You have your taxes account. You have your marketing account. You have your gifting account. You have a travel account.

And you have your business account. And you have a savings. I'll think of it. Like a business savings?

I'll think of it. It'll come to me. I'll think of savings. And when I say savings, I don't mean like a savings account.

I mean, first off, these are all checking accounts. These are all checking accounts, okay? These are all checking accounts, not a savings account. That's just the name of the account that we're going to give it, all right?

Just the name of the account. These are all checking accounts. So what happens is this. Most people start a business, and they have what?

The account. That's what they got. They got the account that their commission's going to. They've got the account that they pay for marketing from.

They've got the account that they book their reservations to the next event and travel with, right? They've got the account to pay their expenses. They got the account to do every single thing. And what happens is that people manage their money based on the amount of money that they see as the balance.

Who's guilty of that? If you see you had $10,000 in there, you're like, oh, I got money. But if you see I got $5 in there, oh, I don't have money, right? And that may or may not be true, right?

It may or may not be true. So the idea behind this is that you break this account up into six different accounts. You go down to your bank, whoever your bank is with. You tell them, I want to open up six checking accounts.

Okay. They're going to say, walk this way. Thank you, right? And when you sit down, they're going to ask you, okay, you know, what type of business you do, whatever it is.

And you're going to tell them, I want to name the accounts as such. Right? Six separate checking accounts. But you want them tied to your tax ID number.

Everybody have a tax ID number? Business account. Anybody do not have that? You're running their business.

Okay. Get out of that immediately. Get out of that immediately. Okay.

I'm going to tell you something about this. I'm not a tax advisor. But I will share with you just some very basic things I don't think will be of any problem. I think Jay Cron will be okay.

All right. This country, not necessarily India, right? Obviously, totally different set of regulatory rules. This country was not designed to benefit people from a tax perspective who are employees.

Okay. It is not. It is designed to help people who are business owners. Okay.

In other words, if you do not have a business, a structured business set up, you are at a disadvantage. You just are. I'm not saying stop working. I'm saying stop working your business and funneling that outside of a business entity.

As quickly as today. Like, get on the phone and change it. Whoever you need to get on the phone with and change it. All right?

Then what you're going to do is you're going to call or you can get on the Internet and you can go, you can follow the SS9. Is that what it is, Roger? SS9, I think it is. Oh, SS4.

It's some form. It's some form where you can create your tax ID number. You can request one. IRS.gov.

Right? IRS.gov. You can do a search for tax ID number and it will tell you what form you need. I think it's like an SS9 or SS4 form or something like that.

SS9. SS9. You fill out the form or you can call. Like, I've called and you just answer the questions over the phone and they will come back and give you the number over the phone.

It's that quick. Okay? So you want this tax ID number for your business. All right?

Then what you're going to do is you're going to open up your checking account with that tax ID number, not your Social Security number. Not your personal Social Security number. Okay? You still have all your stuff going with your personal checking account.

We're not changing that. This is this side over here. This is the business side of things. All right?

So you're going to set up six new accounts, new tax ID number. Tell the person you want checking. You want marketing. You want taxes, gift and travel, and savings.

Okay? See, for me, I've changed it. I think I've changed this to fixed assets. That's the thing.

It's like in my head because I've changed them. Right? But it's kind of I'll talk about why I changed it in a second. But anyway, this is what you want to do.

Now, this is the way the flow of money goes. When you earn your commissions, everything goes into the operating account. Right? So when you set up your profile inside of here.

Your profile inside of your company. Right? And it says, hey, where do you want us to send your money? This account number.

Whatever the last four digits of that number is, this is where you're going to send your money to. Right? And then what happens is that you're going to then reallocate funds accordingly. All right?

Reallocate funds accordingly. So depending on how much you're earning. Okay? That's why I like to give percentages.

I used to kind of give like dollar amounts. But dollar amounts can be tricky. Because if you're not earning that dollar amount for that week, you instantly get discouraged and you change your habits in what you're doing. But if you do it by percentages, then it doesn't really matter.

So in other words, if you make $1,000 this week. All right? Let's just use that. So you make $1,000.

Well, instantly $1,000 is going to go into the operating account. But what we want to do is that we want to maintain 40% inside the operating account. All right? So if you had, let's just say, the $1,000.

Uh-oh. Is that Periscope on somebody? You guys on Periscope? I love Periscope.

Okay. We should be Periscoping right now. Somebody should be Periscoping right now. Anybody Periscoping?

Okay. So 40%. So this means that we're going to keep $400 in this account. Why?

Because we have to run a business. Do you understand what I'm saying? You have expenses in your business, don't you? Don't you have monthly fees?

Don't you have maybe $100? Don't you have monthly fees? Don't you have monthly fees? Don't you have monthly fees?

Don't you have monthly fees? Don't you have monthly fees? Don't you have monthly fees? Don't you have maybe hosting for websites or whatever you got going on, right?

You got to have something in your operating account or else you can't operate. This is why I see people get started and they can't pay their monthly fees. Why? Because they don't have any money in their operating account.

They make $1,000 and what do they do? They go take the $1,000 and they pay the mortgage with it. Now that's a discipline that you have to build to not do that, right? That's a discipline that you have to build to not do that.

Because when you're in a business, your business should fund your business, okay? Your business should fund your business. If you are taking money out of your business to pay personal and it's not allocated properly, your business is going to be at a deficit next month, right? Which creates a whole new set of challenges for you next month or next week because now you got to make this again.

But now you got to make it in a hurry because now your monthly payments are due and you don't have them. Or the event is coming up and you don't have any, right? Now you got to make decisions based on your lack of something that you otherwise would have had you not taken this and allocated to something that was non-business. You guys with me?

Business has to fund your what? Business. Thank you. Okay.

So marketing, 20%, right? So we've got $200. People say, oh, I don't have a marketing budget. Well, why?

If every check you got. You put 20% into the marketing budget, you would have money. You're not even being taxed on this money up front, are you? At your job, you are.

So you can't. That's why you can't fund your business with your job. I mean, you can try to. You can supplement it for a little bit, but you can't sustain it because you need your job money to pay for your life.

You need your business to pay for your business, right? They're independent entities. So if you don't have marketing money, but you made $1,000, that's because you're spending $1,000 on something other than what's going to help propel your business. So I don't have sympathy for people when they tell me that they don't have marketing money.

I just don't. Okay. Gifting, 10%. That's kind of like a customary thing, right?

Kind of standard situation. So that'd be what? $100. Travel?

10%. Another $100. Taxes? I would say 10%, but it's going to depend.

You know what? You're going to have to pay for it. You're going to have to pay for it. You're going to have to pay for it.

You're going to have to pay for it. You're going to have to pay for it. You're going to have to pay for it. Okay.

This is going to depend. You're going to have to play around with those numbers because what happens with taxes is that the more money that you make, you want to make sure that you have enough that you're putting to the side because you're not being taxed, right? The same benefits you have over here to put the whole amount into these accounts is the same thing that can get people into a lot of trouble because they're not saving what they need because the tax bill is going to come. It's going to come, right?

So you cannot spend all of your money. Right? Because even with the thousand that you made, you're going to have to pay taxes on that. And if you do not take out the percentage for taxes, then now when you get paid a thousand dollars next time, now you got to save double as much out of that thousand dollars because you didn't save for this one and now that becomes to be a nightmare, doesn't it?

And then this one is 10%. This is recommended, right? I mean, here's the thing. If you can't survive in your business with 40% of your earnings, something is wrong with what you got going on.

You're spending too much on your operations. Okay? It means you're spending too much on something. Every business, every corporation, they're always trying to do what?

Either increase profits or reduce what? Expenses. Expenses. That's all it is.

And so what we're saying is if you can reduce your expenses, but you can increase the amount of revenue that you're driving into this account, oh, well, you're going to be kind of better. All right? So this is what happens. Now.

Out of your operating account, this then funnels down, okay, okay, you got your personal account, right? Like your money you go to the grocery store with. Right? Like, oh, I got to put gas in the car.

Oh, baby needs milk. That comes out of here. Like, guys, don't do that out of this money over here. Okay?

Don't make a thousand dollars in your business, take your debit card for your business, and then go to the movies at the Red Rock. Right? Unless you can justify that you're doing that, it's a business expense. Right?

But you've got, you've got operating and you've got personal. You've got to pay yourself. You cannot work for free. You don't work on your job for free.

Do you? Who would go to their job and do that job for free? Now, some people would. Right?

Depending on what their job is. Right? But for many of us in this type of room, because of what we're looking to do in life, most of us don't have any other job that we like to go to and do it for free. Right?

So, if you get paid at your job where you are, then why would you not get paid at the job you're trying to go to full-time? So, you're going to starve yourself into wealth. That doesn't work. Right?

So, what happens is that you have to then decide how much you are going to pay yourself. And whatever that's going to be. Now, for me, for me. Okay?

This is just me. Everybody say, for me. For me. For me.

Okay. I pay myself $2,000 per week. That's what I pay myself. Tracy.

Yes. Let them know there's a difference between business revenue and personal income. Okay. Yes.

So, there's this thing called co-mingling. Right? Co-mingling means, let me break it down. Okay.

So, when you have a corporation. Let me break it down. Let me break it down. Let me break it down.

Let me break it down. Let me break it down. Let me break it down. Okay.

So, when you have a corporation, I hope I don't get too deep into this stuff, but you have a corporation, you have a business, you have an entity, right, that entity generates income based on services that that entity is providing or products that that entity is selling. Right? You receive revenue from those sales. The revenue that you generate from those sales is separate from any personal use that you feel you might need to have with these funds.

Right? I kind of just said that. You cannot take money from your business and then go buy gym shoes with them. You cannot take money from your business and then go and decide, oh, you know what?

I think I'm going to buy a new outfit. Now, these are gray areas. Because if you're buying an outfit because you're getting ready to speak on stage at an event, then maybe, right? You can justify that that expense was due for a business cause.

But you're going to Floyd Mayweather's party, and you take your commission money and you go buy a pair of Louboutins. You cannot do that. Now, if you continue to do that over time, what happens is that when you submit your documentation to your accountant, who is going to have to do your taxes because you have to pay your taxes. Everybody?

Yes, I have to pay taxes. Okay. We don't like to. We don't like to.

But it's better to pay them as a business than it is to pay them as an individual. So you just got to pay them. Just get over it. Okay?

You give this up to your accountant. Your accountant has to go through all of your hodgepodge and determine what are true business deductions. Right? And what's not.

If you have a pattern of spending money that is not a legitimate business expense, what happens is that the IRS can call an audit. Right? If they call an audit, now you have to prove documentation that, oh, yeah, my hair was for this. Oh, yeah, my Louboutins, it was for that.

All these different things that I'm saying was for business, I have to prove it. And if I can't prove it, then I have to still pay the taxes on the money, even though in my mind when I acquired the money last year, I used it as an expense. Now it's not. So now you have a higher tax liability.

Right? Now, you continuously do that over time, what happens is that you can pierce what they call a corporate veil. Right? A judge could actually say, listen, you're trying to scam the system.

You're not legitimately running a business as a business. You are having a front as a business, but you have a personal agenda. And there's a corporate veil which allows our taxes to be taxed at a certain rate. Right?

You've got all these benefits of this corporate that can pierce it and say, uh-uh, there's a hole in that. And because there's a hole in that, we don't believe you're running a real business. We believe you're a little front street. And now you've got to pay taxes on everything.

You do not want them to pierce your corporate veil, especially the more money that you make. Okay? So do not co-mingle. In other words, take business and put that in there.

Don't take money. Don't take… Okay, now in these accounts right here, don't take money over here and just throw it in this account because you want to, to make this number bigger because you get used to looking at big numbers and you feel better if you have a bigger number in your account. Don't do that.

Don't take personal funds and put it over here. Don't co-mingle. Don't do any of that. It's just for your own safety, for your own protection.

Again, I'm not an advisor. I'm not trying to, you know, whatever. I'm just telling y'all, look, don't ruffle the feathers of those people. Just leave them alone.

Right? You play the game, by the rules, you'll be okay. All right? Does that help?

Does that do that for you? No, it's good.