Managing Your Money as an Influencer
Money management can be a daunting task but it’s imperative for the growth of your business. Whether you’re just making a few bucks here and there or starting to make some serious income, the tips I’m going to share will help you achieve your financial goals and squash any fear that is holding you back.
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I am not a CPA or a licensed tax professional or a lawyer. In no way does this video constitute financial advice or am I condoning any sort of tax avoidance. The purpose is to make you more informed about the different business structures in the United States.
For advice on your specific financial situation, it’s always best to consult a professional in your area.
Managing Your Money as an Influencer
At the very basics, every business, whether it's offline or online has revenue and it has expenses, right? Revenue is the money you make from selling something and expenses are what you have to invest to be able to make that revenue.
1. PROFITABILITY OF CREATING CONTENT
- The content you create is your product in which you will profit from.
- Creating content on any social media platform has very little overhead and no unrealistic upfront costs either. The revenue you earn from monetizing your content is pure profit and there are not a lot of businesses out there that have this unique advantage.
- You can monetize your content through Google Adsense, Affiliate Programs, and Sponsored content.
- The greater you become at mastering your content and the more views you gain, the more money you’ll make.
- Once you find what is working and profitable, challenge yourself to zone in on that type of content to gain momentum.
- Grow your team! Hiring help can actually make you more money in the long run because you free up more of your time to focus on the more profitable part of your creator business.
2. TAX DEDUCTIONS & TRACKING TRANSACTIONS
Even if you only make $100 for the whole year, you need to be deducting all of your business expenses on your taxes. That means production equipment like a camera, a microphone, any software you're paying for, your internet bill. Do you rent and have a dedicated place in your home where you create content? You want to be deducting that as a home office!
- Deducting all of your business expenses on your taxes (Equipment, software, cell phones, office space, miles, etc.) You could be paying thousands of dollars more every year, for no reason.
- Keep your receipts in a file cabinet or take photos of them on your phone. This is important if you ever need proof of those purchases.
- Investing in a program such as Quickbooks can be beneficial to track all your expenses for the year.
- Having separate bank accounts for your personal and business expenses is important to be able to track your finances effectively.
3. HEALTH & RETIREMENT PLANS
Let’s say you own an LLC, and both you and your partner are employees of the business taking a payroll, you can apply to get a small business health insurance plan. In many states, all you need is at least two employees to qualify for those types of plans and they can actually be more affordable than paying out of pocket.
You can create a retirement plan for your creator business. So for example, we have something called a solo-K, which is basically what it sounds like, it's an individual 401k and what you can do to save on taxes is pretty mind-blowing.
- Your LLC could qualify for health insurance plans that can be more affordable than paying out of pocket.
- You can have a retirement account where your company essentially matches 100% of your deferral.
- Think about getting disability insurance to give you a safety net if you were to get injured and can’t work.
Your responsibility as a business person is to think of all possible scenarios. What is the best case scenario? What is the worst case? What if my viewership declines or I stop making as much money from brand deals, or what if my business accelerates and I start making tons of money, how am I gonna invest that? If you take that objective approach and start analyzing all the different parts of your business, chances are you are going to start getting pretty excited about all the different opportunities and of course, challenges for you to tackle.