Welcome to The Loaf - a weekly newsletter sharing money and business tips for creators & freelancers
Business: 34 Ways to Make Money as a Creator (with Examples) [article]
If you plan to be a career creator, you have to figure out your monetization strategy. Whether you want to sell products, offer services, sign brand deals, teach, or build a community, there's a way to make money doing so.
I've spent the past few months writing this article and for each of the 34 ways listed, I shared a tangible example of a creator who's taking action and succeeding.
Money: How to Pay Off Student Loans as a Freelancer [article]
Paying off debt with variable income is hard. This post from Catch walks through different repayment plans and strategies to help you become debt-free, even with inconsistent income.
Topic of the week: How do I know if I have to make estimated quarterly tax payments?
This is a great question because everyone who's self-employed will have to make estimated tax payments at some point.
Why? Because when you work for yourself, there's no employer to withhold taxes from every paycheck.
The government doesn't want to wait a full year to get their tax money, so we have to pay it in quarterly. If employers didn't withhold any taxes from paychecks, regular employees would have to do the same thing.
But to answer the question, if you expect to owe more than $1,000 in taxes, you need to submit estimated quarterly payments to the IRS.
This introduces another question - how do you know how much you'll owe?
My best advice is that you should be working with a tax professional (CPA or EA) to help with tax filing and they'll help with the calculations, but you can also use a calculator like this one - Estimated Tax Calculator.
Here's an example with $45,000 of income:
Another example - if you made (or expect to make) $10,000 in your first year out on your own, you could expect to owe a little less than $1,000 after the 50% self-employment tax adjustment.
Most likely, you wouldn't owe any income tax (because the standard deduction is more than the total income). Then, because the tax bill would be less than $1,000 total, you shouldn't have to make the quarterly payments. However, because every situation is different and there could be other things playing into your total tax bill, it's important to do your own calculations.
If you have business expenses that qualify as deductions, you can also use them to lower your taxable income, which would lower your tax bill.
Also read: How do tax write-offs actually work?
If you've been freelancing for a year or two, you can use your prior year tax bill as a starting point because according to the IRS, "you are required to pay 100 percent of the total of your prior year’s taxes, or 90 percent of your estimated current year’s taxes - whichever is less".
Also read: IRS' Guide to Estimated Taxes
Payments can be submitted via phone, mail, or the easiest option - online.
They need to be made quarterly by the due dates below and failure to do so could result in an underpayment or late payment penalty from the IRS.
💰 Have a question about money or business?
Hit reply or submit it here
If you have a question but don't want it answered publicly, still just reply to this email and I'm happy to help :)
I met Jerine during a writing cohort last year and she's one of my favorite creators to follow.
She's branded herself as "multi-passionate" and this has resonated with a lot of her following because so much of the advice out there makes it sound like niching down is the only path to success as a creator.
This week's Money Matters:
What’s one piece of advice you would give to someone wanting to get started on YouTube?
Create videos on what you’re excited about. Video is an interesting format because you can tell a lot about a person even if you’ve never met them.
You can tell when they’re passionate about their topic, if they’re genuine about wanting to help others or they’re only here to make money.
Consciously or subconsciously, viewers will be able to tell what you’re up to so make sure that you’re excited about the videos you’re creating. And also, videos take at least 4 hours to edit, and it’s not fun to edit videos that aren’t exciting for you.
Why has a part-time job been important to finding success and fulfillment in creating?
I love this question. For me, it’s because I wanted to create for the sake of it. I didn’t want to attach money into what I create. When I became a freelance writer for big names like Sahil Lavignia, Matt D’Avella or Nicolas Cole, I thought I’d feel fulfilled. But it turns out, I was still creating content for other people’s businesses.
But when I write for myself, I feel fulfilled even if I’m getting $0 for it. So I had to go back to find a job that can sustain the creative life that I want to pursue.
How has being a travel nurse & creator changed your relationship with money?
My first paycheque as a travel nurse was $2,800 CAD working 3 days per week and I was ecstatic. Most recently, I earned about $10K CAD working full-time (and a bit of overtime) for 2 weeks. This whole experience made me feel that I can earn a lot of money without working too hard or working a lot. I recognize this as an unfair advantage as there’s a shortage of nurses everywhere.
As a creator, I feel equally proud even if I’m not making money. My $0 email course template on Gumroad gives me the same, if not more, giddy feeling when I make tons from my nursing job.
This happens because I personally made the product with the intent to help others. As long as the product is getting out there, I don’t really care if it makes me money. It would be nice to make money, but because I have my part-time job, I have the luxury to create from the heart.
(Bonus) What’s your favorite thing to spend money on?
I love spending money on courses. I (almost) never hesitate to buy a subscription or an online course if it’s going to shorten the learning curve. In 2021, I spent about $10K on self-education. Although I recognize that learning can be procrastination for the thing that you really have to do.
As Naval says, “Reading is faster than listening. Doing is faster than watching.” If you want to invest in yourself, make sure you give yourself the time and space to actually apply what you learn. Otherwise, there’s no point.
📈 How to find your target audience
💸 An income breakdown from a creator with 6 revenue streams
👀 How to 5x your hourly rates in 4 simple steps
🛍 Shopify announces partnership integration with YouTube
🎥 Watch: Van Neistat's Guide to Master Storytelling (9 min)
✍🏼 Freelance Finds: How to take vacations and time-off as a freelancer