I apologize for the lack of posts over the past few days. The fact is that I spent most of my working hours compiling, gathering, and sorting out all my accounting from 2007 to give to my accountant.
It took me about a total of 12-14 hours to complete because I have so many different revenue sources. My private ads were the easiest to gather since I keep detailed accounting records in Excel, but I’m an affiliate and referrer of countless websites. I have to log into each one individually, grab the stats for 2007, and then have to export the data into Excel, print each page individually, or paste a cropped screenshot into Photoshop. Then I had PayPal expenses, credit card statements, and other bills to go through…
However, I did finally finish, and am happy I don’t have to go through all that for another year.
If you’re a very long-time reader of my blog, you’ll remember how I used to display my online earnings on the side of my site, breaking them down into average daily and monthly earnings.
I’ve received several e-mails asking why I don’t display this anymore, and what my earnings are now. Well, I removed them for mainly two reasons:
First, my income growth plateaued, and so there was no increase to showcase or boast about. But the main reason I stopped posting this was because it simply took me too long to calculate.
I used to recalculate my online earnings monthly, and then bi-monthly, but it is simply not feasible anymore. I have too many different revenue sources that I do not have the time to spend 4-5 hours recalculating everything.
However, since this is the one time in the year that I do calculate my earnings, I’ll disclose how I did during the year 2007. While I have all the 2007 income information broken down for my own records, I’m not going to reveal them to that degree publicly.
I’m not afraid of disclosing this here, as I always declare 100% of everything to the government, and always play by the rules and by the book. Tax-evasion or tax fraud is the last thing you want to do.
- Private Ads: $71,443.20
- 10% Domain Brokerage Fee: $22,984.99
- Affiliate & Ad Networks: $5,954.64
Total 2007 Income: $100,382.83
- Hosting: $2,846.50
- Cell Phone: $1,481.05
- Cable Internet: $587.40
- Server Administration: $240.00
- Hydro: $374.41
- Paper Receipts: Not Calculated (Estimating $5,000)
- Rent: $1,200
- Mortgage: $13,822.41
- Strata: $2,015.50
- Condo Content Insurance: $198.00
- Various PayPal Write-Off’s (Programming, Web Design, Advertising, Etc.): $9,929.88
- PRWeb: $369.00
- Yahoo Search Marketing: $300
- MSN adCenter: $277.01
- Google AdWords: $1,405.00
- CafePress.com: $122.38
Total 2007 Expenses: $40,168.54*
*Note: Not all of this will be 100% write-off’s, but is simply the total of all the expenses I can write off. My accountant will calculate the correct amount. For example, I do not get to write off $13,800 for my mortgage costs, but only the percentage of square feet my office takes up.
Now that I know the exact amount (albeit gross) I made in 2007, I can give an update on my daily average earnings. I know from my About page:
“As of Jan 1st, 2007, I’m averaging $256 USD a day.”
$100,382.83 divided by 365 is $275. So, a year ago I was averaging around $256 per day, and in 2007 I averaged $275 per day, or around $8,250 per month.
I hope nobody thinks this is an attempt to brag, because that is certainly not my intention. It’d be foolish to try to brag about making only $100,000, since there are thousands, if not tens of thousands of people who make far more than that online. I know several well-known web entrepreneur bloggers who make 7-figures a year. The title was obviously made to attract backlinks and to grab your attention *smile*.
While I seem to have increased my earnings by a bit, the domain brokerage sale which netted me close to $23,000 obviously inflated the results in my favour. Therefore, my goal for my 2008 earnings is to break $100,000 once again. This may seem like a rather easy goal, but really that’s $23,000 I have to account for, which is certainly not easy.
Since my income has slowly but surely been increasing over the past few years and I’m in the second-highest tax bracket now, it’s time for me to finally incorporate. So, I went to see the corporate accountant at the firm where I get my taxes done, while dropping off my 2007 income tax documents to the female accountant who normally does my income taxes. I went to see him last year, but he decided it was a bit premature at the time to incorporate.
However, he thinks it’s fine for me to incorporate now, and referred me to a corporate lawyer. Fortunately, the corporate lawyer’s building was only a 1-minute walk away, and I managed to book an appointment for this Monday to start on the road to incorporate.
I’m very excited, however, I was rather embarrassed by how just little I understood when my accountant was explaining things to me. While I think I’m pretty good at managing my own money and spending it online, I’m very bad with actual financial analysis and legalities… all that bureaucratic stuff.
I hope the corporate lawyer will explain things to me in very basic and simple terms. Incorporating, as I know it, will mean I’ll have learn a lot of new things in a short period of time. I’ll probably have to open a separate bank account for the corporation, I’ll have to work out how I’ll be paid, and how much to pay myself. I’ll need to know so many things… I hope I’m not in over my head here and drown myself… but I really need to incorporate. I probably owe around $30,000 in income taxes for 2007… I’ll know the exact amount once my accountant finishes with them.
I’ll keep you guys posted on my journey to becoming a corporation and let you know how my appointment with the corporate lawyer goes on Monday.