Hello there friends, I hope your March is off to an excellent start. I have some big news from the most recent podcast episode to share. I'm leaving my day job to go full-time online, and we're moving to California!
I have to start this month's update with some very sad news from my family. On Monday, we had to make the very difficult decision to say goodbye to our dog Saucy. She was an amazing companion, friend, and cuddler. We miss her deeply. I have never had to say goodbye to a dog before, and it was an incredibly heartbreaking experience. I'm grateful for the time and memories we had together, and I hope she's moved on to a giant yard with no fences, lots of toys, and an unlimited supply of Hebrew National hot dogs.
A New Career and a New Home
On a more positive note, I have big career and life news to share. A few weeks ago I shared with my boss the news that I am leaving my day job. I'm going to pursue my online income full-time! Obviously this was not a decision that was taken lightly. My wife and I have discussed this possibility for years, and meeting my 2015 revenue goal of $40,000 was proof enough to us that we can make it work. This has been my dream for a long time, but it was only in the last couple of years that it looked to be possible. Taking the leap of faith to leave a full-time, stable income is not a decision that anyone can make in haste. It took years of planning and a giant savings cushion to make it work. And, worst case, I can always find another job.
I must really hate my money, because at the same time I'm walking away from a well paying finance job, we've decided to sell our house in Portland and move south to California, one of the most expensive states in the country. Also not a decision made in haste, we are moving to live closer to family. The warm weather year round and the beach are just a perk. On the flip side, buying a house like ours in the area we would really like would cost us well into the seven figure range, so we are looking to rent for our first 6-12 months while we decide on a long-term game plan to buy a new home.
I believe that with an extra 45-50 hours per week free from the responsibilities and stresses of my day job, I can more than double my monthly income. I have a stretch goal of $10,000 per month, but my more realistic plan is to shoot to fully replace my day job income's monthly rate by the end of the year. That means I'll have to bring in over $6,000 per month going forward. Having done that on occasion in the past, I know it is something I am capable of. (I am opting to not disclose my exact day job income to protect colleagues and the company who may follow this site)
Since breaking the big news to family and my employer, I have added two new freelance writing clients that will make up nearly 40% of my day job income each month not counting existing clients. I plan to add or pickup the pace with 2-3 more clients to reach my day job income. But remember, I'll be paying for 100% of my family's health insurance, retirement savings, and other benefits going forward. I need to make about 10-15% more than my day job paid to cover the cost of those benefits, and even more to cover my new self-employment taxes.
To make the best use of every dollar I bring in, I am planning to reorganize my business as a Wyoming registered S-Corporation to replace the current Oregon registered LLC. In the new business structure, I'll be able to significantly lower my self-employment taxes and save on some California business taxes. Of course, I'll still have to pay California income taxes, but a penny saved is a penny earned, and the new structure may save me up to $10,000 per year between Federal and state taxes and fees.
Things are still moving forward with Money Mola, my new family and friends lending business. We have a working demo in place, and are working on the final touches to incorporate the payment system to transfer funds between users. I've sunk in more money into this business than any other pre-revenue project I've ever had, so I'm certainly not giving up just because I'm moving. I'll actually have more time to dedicate to this business thanks to my new career.
I've also been making great progress on my goal to learn PHP and other coding languages. My first web app is complete! If you want to give it a whirl, check out Kosher Fish, an app to tell you whether a specific type of fish is allowed by Jewish dietary laws. I've had trouble finding this information easily online, so I decided to solve the problem. My next step is learning how to code an iOS and Android version, which will be available in the respective ad stores. I plan to offer a free, ad supported version and a paid, ad free version.
As part of my long-term plan, I’ve decided it’s time for me to learn to code more on the backend of websites, and I’m over 60% of my way through a PHP course I’m taking online. I already know HTML and CSS, so building a static website and updating a WordPress theme is a piece of cake. At the end of the PHP course, I’ll also know how to create my own custom WordPress plugins, and my very own apps and dynamic websites. My first project is going to be an app for people to quickly look up whether a fish is Kosher or not. Check out the very premature landing page for Kosher Fish. So far ads on KosherFish.co have brought in about $1.90. Not much, but it's a start. Even Bill Gates and Mark Zuckerberg earned their first dollar somewhere!
My number one focus right now is freelance income, as that will be my primary income source starting on April 9th. Personal Profitability is my second focus. Money Mola and other projects will take up the time in between.
Side Business Income
Narrow Bridge Media – All Online Income Projects
My online income tracker shows my entire history of online income since I began tracking, and it shows how volatile freelance work can be, particularly when doing it part-time. I update the page
monthly when I remember with all of my online income histories since I began tracking monthly.
I had originally set a revenue goal of $52,000 this year for my online businesses. That is $1,000 per week. Let’s take a look at February to see how I did. I used to build this report manually each month, but now use my QuickBooks report center for monthly updates. These categories match my business accounting structure.
Revenue – Goal: $52,000 in 2015 ($1,000 per week average).
- Advertising Income (Affiliate + Direct) – $477
- Freelance Income (Website Support & Freelance Writing – $4,215
- Product Sales – $1 (Thesis Post Image Converter, eBook here or Amazon)
- Computer and Website Expense – $855 (Includes ConvertKit email service, GoDaddy and other registration fees, and BigScoots hosting)
- Continuing Education – $3
- Meals & Entertainment – $0
- Outsourced Labor – $252
- Telecom – $57
- Travel – $0
Total Revenue: $4,692, Total Expenses: $1,167, Total Profit Before Tax: $3,525
This month, my web hosting fees were much higher than usual. I was unhappy with performance at my old hosting company, and decided to give BigScoots a try about a month and a half ago. I have had better performance, speed, and service than any prior host, so I upgraded to the highest level of shared hosting they offer to combine all of my hosting accounts back into one. So far, so good. I pre-paid for three years up front, hence a $482 hosting bill this month. I also extended the domain registration on this site for 9 years at a cost of $108.
If you are new here and want to see more history, check out my earnings by month since 2012 at my online income tracker.
Denver Flash Mob – Flash Mob Consulting and Planning
My wife has officially taken over duties running Denver Flash Mob, which is giving me more time to work on freelance projects and this website. She’s doing an excellent job so far as the Chief Operating Officer / Chief Mob Officer. We have run into some schedule issues being remote owners, but we’ve been working through them. Not much happened in February, which is making me wonder if flash mobs have run their course.
- Custom Flash Mob Payments – -$0 (includes pre-payments/refunds)
- 7 Step Flash Mob Planning Workbook Sales – $0
- Outsourced Workers – $0 (includes payment for pre-paid events)
- PayPal Fees – $0
- Website Expenses – $0
- Business Registration – $0
Total Revenue: $0, Total Expenses: $8, Total Profit Before Tax: $0
A few months back I signed up for Digit, and automated savings account that you manage via text message. Here is how my savings have added up with zero work on my part. The more I use it, the more I love it for how easy it is to use. With the demise of my 401(k), I may use this as my new saving source for our Roth IRAs.
- Total Savings Since Joining: $3,868.78
- Number of Transfers: 150
- Average Transfer Size: $26
If you’re interested, sign up for Digit here.
So this whole thing is getting turned upside down with my new job. I will definitely miss my 401(k) match – take advantage if you are not! This is the last time you'll see my old automated retirement savings structure. I am holding out on funding our Roth IRAs for 2016 until I know how things will come together with the new business. I am currently on cut spending and hoard cash mode, so retirement is taking a back seat for the next few months.
My automatic investing in my retirement accounts has been going along as planned. It is nice to see so much cash going into our savings for the future. I have been debating funneling some money into a regular taxable account that could support early retirement, but for now this is the setup I’m sticking with:
- 401(k) Contribution – 6% automatic from paycheck
- 401(k) Match – 3% automatic by employer
- Roth IRA – $5,500 of $5,500 max for 2015
- Roth IRA (Spouse) – $5,500 of $5,500 max for 2015
- Employer Stock Purchase Plan – 3% with 15% discount on market stock price
If you have an opportunity to get any employer match, make sure you are taking 100% of that, or you are leaving free money on the table. If you have any old 401(k) plans from former employers, make sure to roll them over into an IRA where you can save on fees.
If you are not sure where to start with retirement investing, be sure to check out Betterment as an option. I have been a customer myself and love the ease of use of their product. I'm also a member of their writing team.
Individual Stock Portfolio
While I think most people are better off investing in low-cost funds or through a service like Betterment, I have a lot of financial education and do my best to make what I can in the stock market. I’m not perfect, but I’ve done pretty well. If you want to learn more about investing, check out my complete beginner guide to the stock market.
I have my individual stock portfolio details below. In addition, I have (much more sizeable) investments in diversified funds for retirement and a holding of my full-time employer company stock in an employee stock purchase plan account. This month, I picked up a few oil stock while they are way down. This is the “buy low” part of “buy low, sell high.”
In addition to Charles Schwab, I have an account at Loyal3. Loyal3 offers 100% fee free trades and the ability to participate in IPOs, also with no trade fees. Here is a post all about how Loyal3 works.
If I did not have such great benefits from Schwab, I would seriously consider moving my primary investment account to TradeKing. I met their team at FinCon in Charlotte this year, and their product has grown to be a top-notch investment account offering. And trades are less than $5!
My Favorite Investment Analysis Tool – It’s Free!
The best tool I have found to help me keep my portfolio balanced is Personal Capital. The site helps me track and manage my bank accounts and credit cards too, but the site has helped me save hundreds of dollars per year by showing which investments are charging the biggest fees and how to balance my portfolio for my goals and risk tolerance. The site is completely free.
The stock market has taken a beating so far this year, but that doesn’t mean all is bad. The stock market moves in cycles, and time and again we see that timing the market doesn’t work. Instead, remember to focus your investments on the long-term return. If you are new to investing be sure to check out my in-depth guide to the stock market to get started with investing.
After a multi-year amazing run with no defaults in my Lending Club account, I have been disappointed to see more losses lately. Even taking out past due notes, my net annualized return is still an impressive 9.66% return on my investment. This is much better performance than any bank account and most investments. I have earned $481 in interest, so even with my losses and the potentials on the horizon, I am still way up overall. Including cash, my adjusted account value is $1,149.82. Because of recent losses, I have been holding onto the cash in my account while deciding on a new plan. I am looking at an investment management service just for Lending Club, and will share it with all of you if I decide to give it a go.
My Notes at a Glance:
- Not Yet Issued – 0
- Issued & Current – 45
- In Grace Period – 0
- Fully Paid – 50
- Late 16-30 Days – 0
- Late 31-120 Days – 3
- Default – 0
- Charged Off – 8