Income Report for February, 2015 – The Tax Man, Debt…and Insecurity
Every month I publish an income report…why? Good question 🙂
With all the shiny objects out there it’s easy to spend WAY more than you’re earning. Luckily I realized this early on and I’ve kept detailed records of my expenses ever since. That being said, I know that there are certain expenses that are NECESSARY when running a business. As much as I don’t want to pay for them, I need to pay for my email autoresponder, website hosting, and video hosting every month. It’s just a part of doing business. There are other things that I buy as well, but I try my best to keep my expenses SIGNIFICANTLY LESS than my revenue. If I can do that then I’m ahead of the game.
On my show I ask my guests a lot of personal questions. One that frequently comes up is “How much do you make?”. I feel like I need to reveal my own income if I’m going to be asking others the same question. It only seems right.
There are a lot of online marketers out there who fake-it-till-they-make-it. In other words, they fudge their numbers and exaggerate their earnings in order to establish false authority in their niche. My goal is that by watching my income grow slowly over time you’ll realize that there is no get-rich-quick button.
Here’s my results for February, 2015.
100,349 page views (+36,000 from January)
25,860 Youtube channel views (+1,597 from January)
131,530 minutes watched (-50,352 from January)
Aweber subscribers: 6,608 (+136 subscribers from January)
GetResponse subscribers: 5,548 (+393 subscribers from January)
Total email list subscribers: 12,156
Easy Webinar 4.0: $521.17 – I’m using this software to set up auto webinars so that people can watch when it’s suitable for them
GoToWebinar: $150 – I use this for live webinars and training
Wistia: $139.84 – This is how I host my sales videos and course content. Normally I pay a lot less, but I had some spam traffic that unfortunately I have to pay for.
Dropbox: $99 – I use dropbox to backup my business
Facebook ads: $86.38 – Ad money spent for FB list building
Aweber: $69 – This is my list building software that allows me to email everyone when there’s a new interview
GetResponse: $65 – This is the autoresponder I use for my buyer’s list and solo ads
Traffic Planet Hosting: $50 – The hosting account that I recently switched to. It’s super fast and I’m very happy with it.
oDesk Virtual Assistants: $46.25 – I have some workers helping me with daily tasks that don’t need me. I’m trying to outsource more and more daily.
TimerLay: $39.95 – A fantastic tool for adding scarcity to your sales pages
Improvely: $29 – This is a tool that I’m using to track the lifetime value of leads
Skype: $19.99 for premium – I do all my interviews with Skype and Ecamm call recorder on a Mac.
Resell Rights Weekly: $19.95 – Reoccurring membership fee for the bonuses I add from my interviews and reviews
Schedule Once: $19 – A tool I use for scheduling coaching calls
WuFoo: $14.95 – A tool that allows me to take applications for my coaching program
Sendgrid: $9.95 – This integrates with Easy Webinar 4.0 and allows me to send reminder emails to my registrants in a timely manner
Amazon S3: $4.75 – I use this to host images and videos
Total expenses: $1,384.18 (+$732.20 compared to January)
Solo Ad Business Blueprint (CLOSED): $11.60 from interview with Kate Rosenberg
Inner Circle Solo Ads 3.0 (CLOSED): $9 from interview with Rob Stafford
Arbitrage Autopilot Profits (CLOSED): $8.76 from review and interview with Zak Loveday
Long Tail Pro: $7.60 from interview with Spencer Haws
Total revenue from interviews: $24,353.47 (-$4,133.71 from January)
Affiliate Income Secrets: $2,242.76 – My product teaching how I make money from affiliate marketing
Resell Rights Weekly: $69.85 – This is a website that has a ton of products that you can use as your own
Kindle earnings: $25
Total from OTHER streams of income: $7,222.83 (+$4,517.38 from January)
Total Revenue: $31,576.30 (+$383.76 from January)
Total Profit: $30,192.12 (-$348.53 from January)
I’m a bit behind on getting this income report out…but better late than never…and the thing on my mind is this: taxes and debt.
In 2014 I paid the minimum amount necessary, which is 100% of the previous tax year based on my previous income bracket. I made $17,565 in 2013 and paid $2,484 in taxes, therefore I had to pay at least $2,484 to be covered against any penalties in 2014 (I ended up paying $3,500 to be sure). I didn’t make estimated payments every quarter as I prefer having as much liquid cash as possible, and I’d rather make interest on my money.
I made $177,434 in 2014 so I ended up with a significant tax bill. As an American living abroad I get a bit of a tax break, but I still pay a hefty self-employment tax. I estimated that I would owe about $20,000 to $30,000 in taxes, but that bill ended up actually being $38,000, plus $9,500 for my first quarter estimated tax payment for 2015. I learned about this in mid-February, and fortunately I had put aside $50,000 in preparation, so I was ready to pay it. However, my wife had other plans 🙂
She had started looking into buying our first apartment. She had her eye on a small 2-bedroom place close to her parents,which would be convenient for everyone once we have kids. After negotiating, the price was about $170,000. With the $50,000 that I had saved for taxes, we had $150,000 in cash to put towards it, therefore only having to take out a $20,000 mortgage. But of course I was hesitant. If I used the $50,000 I would need to make $44,500 (I had already paid $3,500) by April 15th. That seemed like a LOT of pressure.
I explained my apprehensions to my wife. But she asked, “how much did you make in January?”
I answered, “$30,000.”
“And how much will you make in February?” she asked.
“$25,000 to $30,000” I said.
“Ok, so at that rate, in March and the first two weeks of April you’ll make $40,000 to $60,000. You can do it. Trust yourself.”
I tend to doubt myself a lot, and I’m grateful to my wife for her faith in me. I swear, I couldn’t have done all this without her. After having my rankings for 750 Adsense websites that were making me over $100 per day WIPED out overnight from a Google algorithm update I’m a bit paranoid. I try to be prepared for disaster, and thats why I get a bit uneasy when I don’t have fluid cash reserves in the bank.
And the thought of taking out a mortgage, even for just $20,000, made me uneasy. I HATE paying interest. I have a couple credit cards with a spending limit of over $20,000. Some people think that’s a license to spend, but I just see it as a way of making money when I spend on everyday things by earning points that I can redeem for cash, plane tickets, or other fun stuff. So, I always pay off the full balance on my credit card every month….and reap the rewards for spending 🙂
If we bought this apartment I’d go from financially secure and in the green, to having $44,500 in unpaid taxes and owing $20,000 for my apartment. That’s a total of $64,500! Thats the amount that I needed to get back into the green again and be debt free.
So what did we do? We got the apartment…and the mortgage that came with it 🙂 Unfortunately we can’t move in until October (there’s a renter inside), but the rent money will pay for our current rent. We’re still not technically living “rent-free” as we’re making payments on the $20,000 mortgage, but hopefully in the near future one of the BIGGEST expenses in our lives will be a thing of the past. For me that’s TRUE wealth.
Stay tuned for my upcoming March income report where I’ll be talking about how being in debt and under pressure has affected my business…and my life.
In the comments below let me know your take on taxes, debt…and insecurity.