Money is a tool. It helps us survive, and it helps us build the things we want to build. Talking about money is taboo, but I believe this should change.
I’m going through a season of my life where I am finding transparency and vulnerability to be empowering.
The people who I follow most closely, are the most transparent. And it helps me that they’re willing to share about their life, career & finances.
Transparency is helpful to everyone
So in that spirit, I’d like to do a breakdown on my fiscal year 2014. This will include each of our streams of income, and how high our expenses had to be in order to earn that.
2014 was a bit of a roller coaster year for Paige and I. I started a new business, MoGraph Mentor, without much knowledge as to how it would go financially. I’m happy and grateful to report that the new business had a fine first year, and there is momentum to build on. Here is our total revenue and expense breakdown for Fiscal year 2014.
Total Revenue : $270,000
Total Expenses : 120,000
Net : 150,000 (Pre-Tax)
Taxes (32% Rate) : 52,500
In our pocket after taxes : $97,500
As you can see, we brought in a decent amount of revenue, but had to send out quite a bit in order to earn it.
Now lets do some breakdown on this
MoGraph Mentor Revenue : $150,000
MoGraph Mentor Expenses : $90,000 (This is based on me taking a $0 salary)
MoGraph Mentor = $60,000 (Net)
Freelance Revenue : $45,000
Freelance Expenses : $10,000
Freelance = $35,000 (Net)
Photography Business : $75,000
Photography Expenses : $20,000
Photography = $55,000 (Net)
Most of the MoGraph Mentor Revenue will probably need to be re-invested
MoGraph Mentor has high expenses. Working with small groups of students requires a lot of man power, versus something like selling pre-recorded content, which has relatively no overhead.
It’s most definitely not a passive income model.
Having a customer service cycle that begins with an Admissions director and goes through 3 instructors over nine months, while maintaining a monthly billing infrastructure, causes MoGraph Mentor to spend well more than half of what it takes in. To be honest, it’s not a very good business model (financially speaking), but it’s a passion project and a it’s way too much fun to stop.
Even if MoGraph Mentor maintains tight margins going forward, I hope it continues for a decade.
But this means, keeping most of the cash on hand to continue to improve the web site, produce more original content and continually increase mentor compensation.
The truth is that I’ve stilled paid myself 0$ for MoGraph Mentor.
I’m hoping to pay myself a year end bonus with the profits, but my bigger priority is improving the program and increasing awareness through marketing.
My freelance work took a back seat in 2014
My earnings as a freelancer over the last three years are as follows :
- $72,365 (2012)
- $97,201 (2013)
- $45,000 (2014)
So it seems I let about 50K in business walk away, due to my focus on MoGraph Mentor. This is hardly bad news.
I was hoping this would be the case, and I’m a much happier freelancer now only doing about 5 projects a year.
I’m grateful that MoGraph Mentor allowed this to be the case.
Paige killed it in 2014
My wife and I started a photography business in 2010 and it has grown slowly over the last 4 years.
2014 was the best year for the business financially.
We shot (I second shoot with Paige, although she is increasingly phasing me out and using younger photographers) 30 weddings, which resulted in making around 75K. The expenses on this business are travel.
We shot in Atlanta, Seattle, Las Vegas, Mexico, New York, Charleston & a bunch of other places.
With Paige’s big financial year, this allowed me to work on MoGraph Mentor for 12 months without taking any money out of the business for our personal expenses (house, car, etc..). Without the photography business, it would have been a much more difficult year financially.
Self-employed individuals get the lovely benefit of paying an additional 8% taxes. FICA taxes such as social security and medicare (16%) is split between employers and w-2 workers. But for freelancers and entrepreneurs we get to pay the full 16%. This is on top of:
- Federal Income Tax
- State Income Tax
The good thing about the self-employment taxes is that they are consider a deduction, so it brings the overall rate down slightly. Taxes are high if you earn in certain brackets, but it’s still better than Denmark’s 60% rate.
Looking to 2015
In 2015 we’re going to make some changes.
It’s likely that we’re going to be launching a new business, one with a social cause component.
After the death of my Father, my urgency for making a positive impact in the lives of others is now at a 10. We’re going to keep investing our time and effort into our current businesses, while attempting to move our efforts in the direction of serving others and being more generous financially. MoGraph Mentor, My Freelance & Paige Jones Photography are all in a healthy place and we plan to re-double our efforts to make these even more streamlined and efficient.
Bottom Line : Continuing to Diversify
Paige and I are going to continue to find new ways to earn money and bring value with our skills and passion.
This year taught us so much and we’re grateful for all the lessons learned.
It was a fun year. I got to earn a living doing what I love and trying new things.
I’m grateful to have made so many new partnerships with talented artists and leaders.
2014 has been a year of rapid growth for us and we’re looking forward to what 2015 has in store.
The best is yet to come.