How Much Money Do You Need to Make to Be a Full-Time Creator?

December 5, 2021
Newsletter

Started taking Aaron Aalto's Draw in Business course over Thanksgiving break and couldn't recommend it enough to anyone wanting to get in touch with their inner child, or who just wants to learn how to sketch ideas in a simple way.

​My first 3 finished drawings:

Creator Crumbs

Business: How to Get Brand Deals with Less Than 1,000 Subscribers [Video]

There are countless ways to make money as a creator but when you're small, brand deals may seem out of the question. However, Justin Moore, creator business coach and founder of Creator Wizard, breaks down how small creators can land brand deals in this 90 minute livestream.

My favorite takeaways:

• The more niche you are, the more opportunities you will have

• Seek out smaller brands that you believe in

• Consider offering to make content for their brand, rather than sponsoring your content

• Know your worth / know your rates

Money: The Life-Changing Magic of "Profit First" & How I’ve Set It Up In My Business

If you've ever felt lost trying to manage business income, it may be time to read Profit First.

In this recap, Louise talks through how she's implemented the profit-first method into her business which has allowed her to pay herself consistently while easily setting aside money for taxes and other business expenses.

Strategy: 15 Useful & Non-Obvious Tips on How to Run & Market Your Newsletter

Newsletters are like 2001 Honda Accords.

Reliable, trustworthy, and underrated.

As a majority of creator businesses are built on social media platforms, you need to be aware of and take action to reduce platform risk.

Platform risk is when you build your audience on rented land - like Twitter, TikTok, or YouTube - and your ability to use the "platform" is directly tied to your ability to contact your audience. The platform could delete your account, limit your reach, or remove your ability to monetize.

Newsletters minimize this risk because the email addresses are yours and you're building on owned land, not rented.

My favorite takeaways:

• Follow the golden rule of distribution: 90% distribution, 10% creation (need to get better at this one myself)

• Repost newsletters on blog and SEO-optimize

• Build your own distribution engine. Make it a habit, don't rely on your memory to post content across channels.

• Clean up your inactive subscribers periodically (once in every 2-3 months)

Also read: Jack Butcher & Anthony Pompliano Show The Importance of Owning Your Audience

How Much Money Do You Need to Make to Be a Full-Time Creator?

This is a question I've been thinking about for the past three years. And I don't think I'm alone.

If you just spent the past five days at your 9-5 job, taking orders from a boss, being underappreciated, you've probably day dreamed about a life where you can work for yourself.

And we live in a time where it's never been easier to do so.

But how much do you actually need to make to make it a reality?

Well, the equation is made up of two equal parts - business finance & personal finance.

To figure out how much money you need to make, you first need to know your personal expenses so you know how much your creator business needs to make to sustain your lifestyle. It sounds boring, but take some time to go through your recent expenses and get a rough idea how much you spend month to month.

That gives you a starting point to work from.

So let's say you spend about $4,000/month. At an absolute minimum, you need to be making $4,000/month outside of your job to be a full-time creator.

I say absolute minimum because we haven't taken into account taxes.

Since being a full-time creator would mean being self-employed, you have to pay an additional 15.3% tax on top of ordinary income - and it's generally recommended to set aside 25% of your income for taxes.

So considering taxes and $4,000 of monthly expenses, you may need to aim for $6,000/month to go full-time.

But that's not all.

If you're going full time, your creator business is most likely going to have some expenses as well - whether it be softwares, subscriptions, memberships, courses, or equipment - so those need to be estimated and included in your projections as well.

But overall, there isn't one specific answer of something like "once you make $10k/month, you can be a creator and work from anywhere".

Why?

Because if you spend $11k/month, you're still not able to sustain the self employment.

For example, I've technically been a full-time creator/freelancer for the past year while earning $1-2,000/month from freelance writing roles. My expenses are low enough right now that the minimal income is enough for me to be "full-time".

But for someone with a family or more responsibilities, that magic number may be $7k.

Your freedom is tied to your situation and your recurring expenses.

You may have a significant other with income and that can help bridge an income gap, but overall you need to take a couple things into account:

Your minimum viable spending - i.e. how little you can live off of each month that could allow you to go full-time. This would include expenses such as mortgage/rent, insurance, food, bills, etc.

How sustainable (and profitable) your creator business may be - how are you going to make your money, how much effort/ongoing attention will it require, etc.

Future costs - this is going to vary person to person, but if you plan to start a family over the next several years or make a big move, potential large expenses need to be taken into account

Some additional things to keep in mind when figuring out your magic income number:

Taxes: Don't forget about the additional self employment tax. While writing off business expenses can help lower your taxable income, self employment tax is another 15.3% on top of ordinary income tax.

Insurance: Health insurance is a biggie with costs ranging anywhere from $10-$500+/month, but don't forget about others such as disability/business overhead or term life.

Retirement accounts: You won't have access to a standard 401(k) through an employer, but can use accounts such as a Solo 401(k), Traditional or Roth IRA, or SEP IRA

Variable income: Unless you have consistent brand deals or clients on retainer, your income is probably going to vary month to month. Know this going in, be proactive, and build a cash flow plan to bridge those lower income months.

Emergency fund: Having an emergency fund with 3-6 months (or longer) of personal expenses and a few months of business expenses can give you a runway to create and build without needing income

New blog post coming soon: 37 Ways to Make Money as a Creator (With Examples)

How Much YouTube Paid

Source

Mikhaxl

Mikhail creates side hustle vlogs where he tries services such as DoorDash and Amazon Flex and shows how much he made doing so.

He started uploading to YouTube in June of this year and by September he'd reached 1,000 subscribers and 4,000 hours of watch time to qualify for YouTube monetization.

Stats from his first 30 days of monetization:

Subscribers: 2,460

Views: 29,946

Best performing video: How Much I Made Working Amazon Flex for 12 Hours (34k views, $336)

Total 30 Day Ad Revenue: $666.30

The thing that continues to impress me about YouTube and monetization is that a lot of the time, one or two videos are the main source of views/revenue for smaller channels. If you can create one video that gets picked up by the algorithm or performs well via search over time, you could have a small passive income source or a building block to continue growing your channel.

Watch the full video

..more crumbs

🦑Mr. Beast spends $3.5 million on 26-minute recreation of Squid Games, receives 42 million views in first 24 hours

🥑 Serena Ventures, Serena Williams' venture fund, leads $1.5 million funding of Foody, a startup aiming to help culinary creators monetize recipes

💰 Racket raises $3 million from 28 investors to fund their < 9 minute podcast platform

🎥 YouTube reveals 2021's top creators and trending videos

❓ Have a TikTok account? You may be entitled to financial compensation via class action lawsuit. Here's how to file a claim

📈 The rise of small creators and what it means business-wise (h/t creatorwizard)

Tool of the week: Dewey (10/10): A browser extension that turns your Twitter bookmarks into an organized, searchable database

Watch: Coinbase CEO Brian Armstrong on Cryptocurrency and the Future of Decentralization with Garry Tan

Freelance finds: Alice Lemée's top writing resources that helped her go from $1k/month to $6k/month in one year of freelancing​

#OnDisposable

Source

Keep creating,

Treyton DeVore

treytondevore.com

Treyton DeVore

Treyton is a creative entrepreneur, writer, and financial planner.

He's been featured in Morning Brew, NerdWallet, Marketwatch, and more.

treytondevore.com

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