How I Spend My $25,000 Monthly Income
a lot of people talk about making money online it's something i do quite a bit on this channel since we talk about the creator economy how to be a full-time content creator and start your own small business but what a lot of people don't do is they don't break down how they're spending their money and how they're investing it long term and what the actual cost of doing business is for them sometimes you do have to spend money to make money especially if you like nice camera gear so today i'm going to be breaking down how i spend my 25 000 a month income i'm gonna be talking to you about the profit first business model and also a little bit about uh taxes and retirement none of this is financial advice but i do feel that if people were more transparent about money and it wasn't this big shameful taboo or everyone didn't assume you're bragging about it then we could just have more honest conversations and it would help a lot of people become more financially literate and just better at managing their money this is also not an income that i just magically earned overnight i'm not a viral youtube content creator this is something that took me a lot of years of hard work basically a decade of discipline i'm 37 years old so in real reality i've actually been playing catch up for a number of years because in my 20s i was very low income and in a lot of debt due to my family just having a lot of medical bills being in a single parent home there was just a lot of things that ultimately i feel where maybe i was disadvantaged for a very long time and then i've spent my 30s hustling hard and kind of putting myself in the place that i feel i'm supposed to be now there's a couple of things you need to know going into this one of the things i'm going to teach you about is something called profit first i'm going to break that down for you because then my expenses will make sense to you so with profit first i am paying myself first every time that i make money i take 10 of that and that goes into my savings account there are four main bank accounts that i have and that's actually something really important in this video that i haven't seen in all these you know how much money do i spend videos the breakdown of the bank accounts so i have a savings account and i pay myself 10 percent of all income there first that way i know that you know after all my hard work that i have something that is there to show for it also is a good way to build an emergency fund next i take 15 percent of all of the money that ever comes in and i put into account that's just for my taxes this means that i know that i have the money to make those quarterly tax payments if you're making the quarterly tax payments on your business if you're a small business owner then that means that you can avoid you know interest in any penalties by just waiting longer than necessary and so you can do that any way you want some people pay quarterly some people pay yearly uh either of those is fine just talk to an accountant i have bookkeepers and accountants that's part of the expenses we'll get to but i set up this account just for my taxes so then we have my cost of living i put 35 of my money into this most of the time and this is something that just helps me put all of my bills on auto pay and do anything i need to on a regular basis this is actually separate from my business bank account because for you know tax reasons you want to make sure that you're separating your personal finances from your business finances this is something that a lot of people who are new to making money online where they do videos on youtube they don't talk about and a lot of them don't understand it but this is actually really important so you want that clear separation it's what's called the corporate veil you want to separate your personal finances from your business finances you don't want to co-mingle those and then when it comes to my business expenses i'm spending 40 percent of my income back into my business believe it or not once upon a time it used to be a lot more of a percentage of my income that i was spending back into my business to grow it to scale it you know you don't need as much money to start a small business or start a youtube channel or start doing something creative these days it's actually really reasonable to do most people can do it with the beginnings of a smartphone but to make better quality stuff over time you end up having to invest in things like camera gear microphones and good lighting faster laptop to edit on those things are very real when you're building your business or you're trying to become a full-time content creator so i put 40 back into the business and in my case one thing that made my life better was uh hiring people hiring people part-time and remotely to help me and also hiring my family to be able to help me within my business i've hired both of my sisters they helped me part-time with the business and it's been a massive upgrade in my personal life and in my mental health so let's get down to some of my actual spending i live in the state of georgia so your mileage may vary on this one but when it comes to rent i rent a house my younger siblings are my housemates and i charge them zero dollars in rent and i pay 25.50 in rent every single month this might sound extravagant but giving the needs of our setup and just giving everybody their space uh it works out and so i could save a lot of money if i charge them rent but i want to give them every advantage and opportunity to build themselves up as young people so zero dollars rent i pay the whole 25.50 this might change since i'm actually looking at investing in real estate and being a first-time homeowner so when i decide to go into a mortgage i'm gonna look for something that is comparable to what i'm paying now but i will actually start to get equity and build up net worth for the future instead of that going to somebody else and making them rich for my car note i have a 2018 nissan sentra as of the making this video i'm actually probably getting ready to go into a new car note and trade in my car which i currently again pay zero dollars a month on since it's paid off and i'm gonna get a 2021 and the reason i'm going to get a 2021 nissan sentra is because i will now be in a new warranty the warranty on my current car it's pretty much expired so i'll be safer and i will have less to worry about if i'm just in a new car even though it means paying a car note i'll be in a 2021 and it'll be a lot safer i'll be starting with zero mileage and probably get an extended five-year warranty my other car is also paid off it's a 2016 uh nissan i've given that to my brother and so that's gonna be his car and again also zero dollars on that does mean that i pay more in car insurance though because of having uh more than one vehicle and having a younger inexperienced driver drives up your insurance cost uh so any of the parents out there you know exactly what i'm talking about so again just keep that in mind also my lifestyle and costs are going to be probably different than yours i'm 37 years old i didn't really make a lot of money in my 20s so i've spent my 30s hustling to kind of get where i feel i'm supposed to be by now in life and set up for the future and for when i have a family of my own so just kind of keep some of this in mind take it with a grain of salt this is not something you have to feel like you have to be hitting these numbers or living this lifestyle it's not the real point of this video but it does give you some lessons and insights into managing and spending money as you make it which is something people don't teach you because i don't think enough people really understand it themselves and so this is not financial advice but maybe it'll help you i don't really drive a lot aside from to go to uh photo shoots and you know just business meetings and stuff like that so i don't spend a lot in gas when i don't have to maybe 160 a month i put it on a exxon mobil gas card which i pay off the balance of pretty much at the end of every month i do that for the cash back rewards just i do a lot of cash back rewards it's free money so i know dave ramsey doesn't like credit cards he's great on financial advice i just uh i like getting the cash back so sometimes i'll just use my credit cards pay down the balance and be done with it because actually right now i have zero credit card debt something i worked very hard at um maybe i'll talk about something like that in the future as far as business credit but zero credit card debt is a big deal there's nothing wrong with having a little bit of it if you have to carry it for your business or put on a business credit card or expense things travel but i just try to keep as close to being debt-free as possible especially knowing that i'm going to want to go into a mortgage and become a home buyer car insurance on both cars comes out to about 650 a month that's because when you have young unexperienced drivers on your insurance again parents know what i'm talking about that cost goes up so i'm paying about 650 a month in terms of car insurance internet is 240 with xfinity i have a business package for all the live streaming that i do i have to get unlimited i used to have to pay exuberant fees sometimes if i went over my data cap i don't feel like data caps should exist maybe that'll be a rant at some point but uh 240 on the internet across all the devices i do have an apple watch i do have an ipad pro and i do have you know my android and iphones so with that and then the fact that my siblings are on my phone plan i pay 280 a month for all of our uh cell phones and my plan and so again if you're in a household your expenses will probably be significantly higher than somebody that is completely single and not responsible for any other human beings so again your mileage may vary and this might be a really good lesson for those of you who might be younger as to what you have to look forward to as you get older and take on more responsibility now insurance when it comes to things like health insurance renters insurance business insurance all of that kind of stuff like when it comes down to the insurance policies i have to pay uh that comes out to about 900 a month this will largely depend on your needs in terms of healthcare vision dental but i encourage people to look at getting things like insurance for any of their property whether it's homeowners or rental or especially if you have gear and equipment make sure you're getting insurance for that there are a lot of different options out there and you can look into things like policy genius to get good rates they're not a sponsor at least not yet anyway and so there's just a lot of different things out there try and find a good deal but also don't try to pinch pennies because what you want is to be able to know that if something gets lost damaged or stolen that is essential to you or very meaningful to you that it can be easily placed so that you can just move on with your life and not dwell on it too much in terms of groceries and essentials again with a household it's about 1100 every month also depends on what your nutrition and health needs are whether people you know are vegan what they can eat whether people have other things like diabetes you just have to look at eating healthy if you can and eating clean and i think it's okay to spend more money on this i know some people like to be very cheap when it comes to this but you know when it comes to fitness and health and nutrition uh when you try to be cheap it becomes expensive in healthcare costs so there's that also if you have pets you know that those things are added into that cost so uh tugboat and rio eat very well and are very healthy too and so they're kind of added into that expense now something i do that a lot of people don't is i give myself a personal allowance this is guilt-free money that i can spend on whatever i want and this also helps me balance being frugal without denying myself so i give myself currently a 200 and dollar a week allowance uh this might sound extravagant but it's really not it's basically about 800 to a thousand dollars a month that i can spend guilt-free on whatever i want so for me that might be sushi or it might be you know entertainment might be video games it might be collectibles you guys see that i'm a big fan of like video games and anime and nostalgic things um i also sometimes just like you know doing little things for myself that cost money and so giving myself a reasonable allowance like this just means that i don't feel deprived after all of my hard work then finally overall utilities average aside from obviously what i said with phone and internet cost the overall utilities are about five to six hundred dollars a month which i think is reasonable you can save money as you convert to more eco-friendly things and power saving it also depends on how well your house is insulated but you know you can try and do whatever you want to keep utilities down i just don't stress over it too much if possible you know i'd rather just everybody be comfortable now when it comes to that money that goes into you know my cost of living you just have to remember that i include my retirement and my investing in that and so what i'm setting aside in terms of a lot of that currently uh which is not what i was doing before it's close to about uh two thousand 2 500 a month that goes into that a lot of that is passive i have things that go directly into my sep ira and also i have a traditional ira i have a roth ira but with me i have to put it into my traditional ira and then talk to my accountant about the backdoor stuff that's all more complicated than you need to worry about the point is uh out of the year uh i put you know 6 000 into a more or less traditional ira account but i have a sep ira as a small business owner that allows me to make much larger contributions because i'm both an employee and an employer so i can make the employer contributions to my retirement and that's significantly larger in my case i you know invest in that those accounts mostly through merrell so it's you know it's just with my regular bank it's a traditional bank versus one of the fancy online options nothing wrong with any of those another interesting thing i do is i have an acorns account for investing to do passive investing into s p 500 index funds the way i set it up is not only does it do roundups whenever i spend money so basically whenever i buy camera gear i do anything i go grocery shopping uh the you know leftover change if it's like a bug 50 the other 50 cents goes into this it gets invested for me but i have the 3x multiplier so if i you know have 50 cents i actually charged me a buck 50 and it invested for me in the market so every time i spend money i'm also investing in my future and also i have a recurring daily withdrawal set up to actually invest for me one of these goes into an ira account and the other goes into a regular account in my case um i'm investing daily 65 dollars a day into index funds so i have a very safe stable long-term you know hedge for the future in terms of uh investing and retirement so the main account if i needed to i could also tap that as an emergency fund and then obviously the ira is you know well into the future for retirement in terms of my business expenses i spend uh six thousand dollars a month between uh my part-time team and my freelancers i'm not gonna get into each individual team members compensation that's their personal information and you don't really need to know that i know everyone loves to know what employers are paying their people but it's really more a matter of whether people want to personally put that out there and that's how you respect people's boundaries the overall expenses in my business average now about between 100 000 to 140 000 a year and overall business expenses now with making a 25 000 a month income at least that's what i based it off of from 2020 for what we submitted for my tax filings uh with my accountants i use for my bookkeeping i use bench and then they recommended me to my personal cpas so i have a certified public accountant team that actually handles the back end of these finances for me so what i'm doing is i am heavily investing back into my business hiring a team has been very beneficial to me in terms of getting back my mental health and my personal life so that's actually really strong for me and so i don't mind spending on that at all in terms of the core software and services it actually takes to run my business something i might break down by itself in another video because i feel like this part could be a video it's about roughly fifteen hundred dollars a month in software and services that are set up on recurring subscriptions a lot of that is the fact that for my team i actually pay for each individual team members adobe creative cloud software so i'm paying for a couple of adobe licenses on top of my own adobe license and so as you can imagine that adds up there's also all of the stock photo uh resources we use story blocks epidemic sound uh adobe stock a couple of other ones out there we have some stuff for another channel that we do that we get through music bed uh there's just a lot of built-in expenses like i said i'll probably make another video about it and so that's the subscription stuff fifteen hundred dollars a month for that i have a twenty thousand dollar a year hardware budget this is something that is actually very important to me personally because of some of the other things i do besides what you see on youtube is i do crazy projects like this in terms of the photography side we're also building out a gear youtube channel covering photography audio lighting video hardware software all of it so there are a lot of different projects running in the background in terms of the hardware stuff with the podcast coming back camera gear adds up is inexpensive me i've always wanted to have a full and complete photography setup um it's something that's been very important to me and that i'm very passionate about and if you've seen what i've been doing with my photography you can tell so for me that hardware budget might sound extravagant to most people unless or until you look at what i'm actually doing with it and why there's some shots that only things like super telephoto lenses that look like bazookas can actually accomplish it's also possible that in the future for a lot of the gear that you know i upgrade from instead of selling it we might actually just take my gear that i'm not using and we might actually rent it out something we're looking into there's also travel when there's not an illness ravaging the world when that's not happening i travel for public speaking and not every event pays you for that or maybe not even always up front so we have a 10 to 20 000 budget for travel i also like to do some local projects and i'm looking at doing more of that so again there could be travel expenses associated with that just traveling within the south and then also i love and i'm very passionate about capturing stuff from national parks and more wilderness stuff i mean you can tell kind of that i very much am doing the things that i love and i've learned how to monetize them and that's kind of what i try to teach people on this youtube channel is how to monetize things that let them build a creative lifestyle for themselves now with regard to my taxes it just depends on the year but if you look at 2020 it's over 40 000 in uh taxes so that's something that you have to look at like i said i have those four business accounts and one of them it's just specifically for taxes when you set money aside in your retirement accounts it actually lowers your overall taxable income you can claim deductions that are necessary for your business in terms of gear your software your services and uh the the payments you make hiring contractors or people on your team i love the profit first business model because it means managing this amount of money something i was never formally taught to do a lot of you if you're making significant money you think that your life is squared away once you learn how to make a significant income when you're making six figures or more but what no one tells you is how to manage it properly and no one teaches you that no one teaches you how to effectively manage your taxes and yes i believe and i firmly believe that everybody should pay the legal minimum required amount in their taxes i'm not above the idea of taking deductions that the government and the law says you are entitled to and i think you should be doing that so that that money can then be properly invested that you're retaining into yourself your health your family and your team the people that you um directly are responsible for in your life but that's just what i personally believe none of this is anything i did overnight this is the benefits of a decade of discipline and also just the amount of value that i've been creating by scaling things i learned a long time ago that there's no way to trade my time for money and then still become financially secure and stable and i think the last year or two has taught everybody that job security is largely a myth and while not everyone may feel that they are cut out to be an entrepreneur and i've heard it all before the creator economy has proven that people can take things they're passionate about and build successful lifestyles around it or pick up a side hustle that allows them to invest in their future and with the things that you can do now with investing and the opportunities available to all of us it is possible that something extraordinary could happen that changes your life because you were in a position to take a little bit of risk without hurting the stability of what you need to do for yourself and your family i know the question is always well like roberto how do you make that kind of money and i will be doing a video about how i earn my 25 000 a month 300 000 a year income but i can tell you the short version of it is that it is a combination of what i do here on youtube what i do with affiliate marketing a membership website that i own my personal one-on-one coaching business services that my digital agency provides now as well as doing brand deals and sponsorships i also sell my own digital template bundle it's not an online course there's nothing wrong with that i actually licensed the course to linkedin a couple of years ago that still pays me passive income and now we even have a youtube channel and a music brand that makes me royalties on apple spotify and amazon and that youtube channel is also about to be monetized so there's just a lot of income streams that make all this possible but again at the end of the day making money only matters if you manage it in a responsible way and you're looking at paying yourself first building an emergency fund saving for your retirement your future or if anything should happen to your health and also investing the people that you care about as well as just learning how to properly invest for your overall financial future question of the day what was the most surprising thing about how i spend my income i'd love to hear from you in the comment section if you enjoyed this video look up my playlist in the description down below called not financial advice and then also if you are interested in becoming a full-time content creator i have a video here about making money online that you also will enjoy that is linked in the description down below as well also links to a lot of the things that i talk about and i use will be down there as well thank you so much for watching and don't forget go out there and create something awesome today take care
2021-07-26 11:09
