How to Pay Yourself: Tracey Walker on Setting a Sustainable Owner Paycheck

You’d never take a job and agree to work it for free. Yet plenty of people running their own business do exactly that for months, funneling every commission straight back into the business and never actually paying themselves a cent, then wondering why they feel like they’re starving while the business looks like it’s growing.

Tracey Walker tackles that contradiction directly in this Unstoppable Mastermind session, right after building out the six-account money system from the previous lesson. Once the accounts exist, the next question is unavoidable: how much do you actually pay yourself, and how do you decide that number without guessing?

As someone eyeing the exit from a paycheck that isn’t yours, you already feel the tension in that question. Pay yourself too little and you’re starving toward wealth instead of building toward it. Pay yourself based on one great month and the next slow month wrecks you emotionally as much as financially. This session is about landing on a number you can actually sustain.

How do you pick a number that isn’t just a guess?

Tracey Walker is upfront that her own weekly number started as something close to a guess, tempered by what she calls a reasonable compensation, a standard she frames the way the IRS thinks about owner pay: is this a believable salary for the work actually being done. As she puts it, “I made it up.” Then she adds the real qualifier right behind it: it had to be a number she could stick with, tied either to a flat amount or a fixed percentage of what came in, not something that shifted with her mood or her best week.

The number itself matters less than the discipline of not changing it every time revenue moves. Pick a percentage of what flows into the operating account, or a flat figure you can defend as reasonable for the work, and hold it there through the good weeks and the slower ones alike.

What happens when you pay yourself based on your best month ever?

This is where the session gets specific about a mistake she’s watched repeatedly. A surge month comes in, someone raises their own pay to match it, and the following month reverts to normal while the elevated paycheck stays fixed in their head as the new baseline. The disappointment that follows isn’t really financial. It’s the gap between an expectation set by one outlier week and a reality that was never going to sustain it.

You can’t make $5,000 a month and make $5,000 a month.

That line captures the mechanic underneath the whole system. Because a portion of every dollar earned has to stay in the operating account to fund the business itself, and more still has to be set aside for marketing, taxes, and the rest, the total revenue a business needs to generate is always a multiple of whatever someone actually wants to walk away with personally. Anyone setting a target for replacing a job’s income has to back into that math from what they need to keep, not from the headline revenue number they’re hoping to hit.

Why does sustainability matter more than the highest number you can justify?

Tracey Walker frames the decision less as arithmetic and more as ownership. As she puts it, “You are the boss. You are also the employee.” That dual role means nobody sets this number for you, and nobody bails you out when you set it recklessly either. The board meeting where you’d theoretically approve your own raise is a meeting you can genuinely have anytime, and the only real qualification for calling it is whether the increase reflects a level of production you can actually count on repeating.

A few things worth pinning down before your next payday:

• Set your own pay as a fixed amount or fixed percentage, not a moving target tied to your best week.
• Work backward from what you actually need to keep personally to what the business needs to generate in total.
• Treat a surge month as a bonus to celebrate, not a new baseline to lock in immediately.

Create your free account at empowernetwork.com/watch to watch Tracey Walker walk through the full math behind this and download the audio.

The full session transcript follows below.

Transcript

So this is what I pay myself. So that's coming out of this, out of the operating account. So the operating account is funneling into my paycheck, yes. How'd you come up with that number?

I made it up. I said this. Okay, that's not totally true. Here's the thing.

You have to be able to make a reasonable, I think the IRS calls it a reasonable compensation. So what's reasonable? Is it reasonable that I make, you know, $8,000 a month, like $96,000, like a little under $100,000 a year or something like that, right? Is that reasonable for what I'm doing?

Yeah, that's reasonable, right? I have to take a salary, right? That's reasonable. You could do percentage-wise too, right?

You could say, well, maybe I'm not at the point where I can just automatically do $2,000 per week, but I'm going to do a percentage. Maybe I'm going to pay myself. Um, 20% of whatever I earn or 20% of, you know, whatever. Okay, so you're keeping 40% in the operating account and then 20% of what that is, you pay yourself possibly is what I'm saying, okay?

Maybe come up with a percentage, but you got to be comfortable with the number and you got to stick with the number, which means that when I made a commitment to pay myself $2,000 a week, guess what happens in my production? I got to, look, I got bills paid like everybody else. Right? Except the difference is that I'm not sitting down waiting for HR to just cut my check for doing nothing.

I got to go out there and make shit happen in order to pay myself my $2,000 a week. Now, here's a scenario to consider. At what point would you consider giving yourself a raise? Whatever.

As a CEO of your enterprise, you can have that board meeting anytime you like. You know, you can have that conference right here at the Red Rock if you like. I'm saying that before I show up. To me, it's about sustainability.

Right? Sustainability. And so, you know, don't get, okay, so you had a surge, you had a surge in sales, right? This month, right?

And now all of a sudden, oh no, I'm paying myself $10,000 a week. Right? And then next month, things go back down. Now you're stressing because you're really on salary for yourself for $10,000 a week, but you really only made $10,000 that month.

Now, what does that do mentally? Disappointment. Why? Because you're not being realistic with what your number sequence is.

There's nothing to be discouraged about. It's your own box you put yourself in. Just get out the box. You know what I'm saying?

You don't have to stretch yourself out in that way. So just, it's sustainability. It's what you believe you can do no matter what. You know, if the company is going like this, I feel comfortable with that.

If the company is doing like this, I still feel comfortable with that. It's your own comfort level. Right? And then, of course, because see, now this, let's just say, if this equals $8,000 a month, this needs to be my, this is my rent, mortgage, right?

All of this is coming out of this. Not this. This. Just like at your job.

You get your paycheck. You pay your bills out of your money. That's this. So it needs to be something that, A, will cover what you got.

Otherwise, you're, now you're self-employed, but now you're like a struggling, self-employed person. Right? When you probably aren't struggling that much, just being employed by somebody else. But you're causing yourself to be a struggling self-employed person because you're not paying yourself and you're not generating enough to pay yourself what you need to cover your expenses.

So you say, I want to leave my job. I want to leave my job in six months. Okay, what do you need to leave your job? I need $5,000 a month to leave my job.

Okay, first thing in my mind is that you can't generate $5,000 a month and make $5,000 a month. It's impossible. Why? Because you're only, you're only going to take 40% of that and go on here.

Do you understand what I'm saying? So you want to make $5,000 a month. Do you want to just revenue in your business or you want to walk away from your job to replace your income, your personal income? If you want to replace your personal income, if this is to be $5,000 and then we're, we're basing it off of this, well then this obviously needs to be, well what's 40, 40% of what gives you $5,000?

If we brought in $13,000, that means you need to generate, sales, products, commissions of $13,000 for the month in order for you to even put $5,200 in the operating account. Ooh, aha moment. See, most people are saying, oh, I want to make $10,000 a month. And they make $10,000 a month and then they're still broke and they don't understand why.

It's because of this. Because you didn't make $10,000 a month. You cannot keep everything you make. Right?

Okay, so now $5,200 is staying in here. Right? And if you're going to give yourself 20% of that, well then that's now what? $2,000 something.

Right? So now you're what? $3,000 short. So you got to change this number.

Right? If you're going to play this game, if you're going to actually have 20% going to market, right? If you're going to actually have some money going to gift, if you're going to actually put money into your travel account, if you're going to actually put money into your taxes, if you're going to play this game the right way, this number needs to increase. You got to get on the ball, in other words, is what I'm saying.

That's why $10,000 a month is not a bad number, but I can't, you got to be, your mind, your mind has got to be this way. Right? You got to be generating this type of money in revenue in order to, for most people to free themselves down here. You can't make $5,000 a month and make $5,000 a month.

Everybody with me? You cannot do it. Not long term. You might do it this month.

Because you've had to pay up on this bill, whatever. But you cannot do it long term. You got to start doing this. And you got to get serious about it when you're funneling things this way, right?

Okay. So, this number can be whatever you like. Whatever you want. I mean, there's no, I mean, it's whatever you want.

You are the boss. You are also the employee. You can tell yourself what you want yourself to be worth at this point in the game.