November 2018 Income At-A-Glance
Gross Income for November: $144,622
Total Expenses for November: $25,934
Total Net Profit for November: $118,688
Difference b/t November & October: -$33,661
Why We Publish An Income Report
This monthly income report is created for you, Fire Nation!
By documenting the struggles we encounter and the successes we celebrate as entrepreneurs every single month, we’re able to provide you with support – and a single resource – where we share what’s working, what’s not, and what’s possible.
There’s a lot of hard work that goes into learning and growing as an entrepreneur, especially when you’re just starting out. The most important part of the equation is that you’re able to pass on what you learn to others through teaching, which is what we aim to do here.
**We’ll receive a commission on the affiliate links below. If you click on my affiliate link and sign up for the products and services I trust and recommend, then I will earn a commission.
Josh Bauerle’s Monthly Tax Tip
What’s up Fire Nation, my name is Josh Bauerle. I’m a CPA and the Founder of CPA On Fire, where we specialize in working with entrepreneurs to minimize their tax liability while keeping them in line with the ever-changing tax laws.
I’ve been working with JLD & Kate at Entrepreneurs On Fire for years now, and they’ve included me in these monthly income reports with unlimited access to all their accounts so I can verify that what they report here is complete and accurate.
And because they believe in delivering an insane amount of value to you, my job doesn’t stop at the verification level; I also provide a new tax and accounting tip every month!
Josh’s November Tax Tip: The Foreign Earned Income Exclusion
One of the best parts of being an entrepreneur right now is the ability to make almost any business location independent.
Even businesses that traditionally relied on face-to-face meetings in an actual office, such as CPA Firms like mine, can now be run entirely online.
Look no further than John and Kate spending a couple months overseas while EOFire continued to run flawlessly to see the benefits of this kind of business setup!
And while running a business from anywhere our laptop can travel is great enough on its own, the ability to move outside of the United States for a year or more can also offer enormous tax benefits.
The Foreign Earned Income Exclusion
I see a lot of people who think if they work outside of the US, even as US citizens, they don’t owe the US taxes on any of that income.
It seems logical, but unfortunately it isn’t true.
The US is one of two countries that tax your worldwide income. Meaning, it doesn’t matter where you make the money, if you are a US citizen, then the IRS wants to get their hands on it!
But there is a potential loophole…
If you spend more than 330 days in a foreign country, you can earn up to $104,100 free of any ordinary income taxes owed to the US in 2018 (the amount goes up a bit each year).
So if you live in Costa Rica for an entire year, and make $150,000 profit in your business, then you will only pay ordinary taxes on $45,900 of that income.
This could represent a massive tax savings!
How to Qualify
The basics of qualifying are simply to spend at least 330 days outside of the US.
This restriction is very strict though.
Even partial days you spend in the US, or over international waters in an airplane or boat, count as days in the US.
You can spend those 330+ days in any other country you want, and can travel between them as often as you like, you just have to be outside of the US completely for that minimum number of days.
And as with anything else tax-related, documentation is key. Make sure you keep clear notes on any travel you do between countries so you can show the IRS exact dates and exact locations.
What Else You Should Know
First, a key component is the only taxes that are exempt are ordinary taxes, meaning social security and medicare taxes (known as payroll taxes, or self employment taxes) are still due to the US.
The exemption also only applies to earned income.
This means two things: first, dividends, interest, and capital gains are not excluded from taxes; and second, the entity you choose for your business becomes even more important. S Corporation earnings are not considered earned income, and therefore don’t qualify for the exclusion; so you’ll want to make sure your entity is setup to maximize these benefits.
And finally, what about taxes owed to the country you are living and working in?
That part gets tricky and depends entirely on the details of your situation, such as where you are at, how you are earning the income, etc.
There are a lot of moving parts here. As with any major tax strategy you want to plan ahead and work with a qualified tax professional to make sure you’re all set up properly.
But if you do ensure you’re set up properly, then you can travel the world while taking a massive bite out of your tax liability! What could be better?!
As always, please feel free to contact me if you’d like to discuss what would be best for YOUR business. I LOVE chatting with Fire Nation!
*Bonus* Claim your spot in Josh’s FREE Course on Business Entities!
David Lizerbram’s November Legal Tip: Standard Nondisclosure Agreements
What should a Standard Nondisclosure Agreement include?
Great question, because there may be no more critical tool for new companies and entrepreneurs than a solid nondisclosure agreement!
Generally speaking, standard nondisclosure agreements allow a company to share secret information with other parties while legally prohibiting those parties from spreading the information to a wider audience.
Nondisclosure agreements (also known as NDAs) can be used for a variety of purposes, including dissemination of financial information, marketing plans, new technologies, or confidential business processes.
Having outsiders sign a nondisclosure agreement is also a near necessity in order to protect trade secrets.
So, what makes a nondisclosure agreement strong?
Let’s talk about some of the most crucial clauses that should be included in any good NDA.
1. Define the Parties
This may sound like an obvious point – don’t all agreements spell out the parties involved? For the most part, yes.
In nondisclosure agreements, though, the parties need to be defined with great clarity.
Let’s say Company A enters into a standard nondisclosure agreement allowing it to share confidential information with Company B. The term “Company B” needs to be defined with precision so that Company A knows the group of individuals that may access its information.
Does Company B include all of its employees or only its executives?
Are independent contractors included in that definition?
How about outside vendors?
These decisions need to be spelled out within the NDA so that the parties know exactly who can – and cannot – view the information.
2. Specify the “Confidential Information”
Standard nondisclosure agreements are clearly intended to protect “confidential information,” but the meaning of that term will vary in different situations.
Not surprisingly, these clauses could (and, in many cases, should) be lengthy and complex.
The key is to clearly articulate exactly what is being protected so that there’s no question regarding what information (if anything) can be shared with outsiders.
3. Clarify Whether the Nondisclosure Agreement Is Mutual or Unilateral
It’s also critical to specify whether the obligation of confidentiality extends to both parties or just one. If Company A and Company B are both sharing confidential information with the other, the agreement needs to be mutual.
But if Company A is the only party sharing such information, all confidentiality obligations should fall on Company B.
4. Set the Duration
Many parties forget to negotiate the term of the NDA – in other words, how long the obligation of confidentiality is to last. This is another factor that will vary from case to case.
For example, if the confidential information that’s being exchanged is a marketing plan, the contract term should be at least as long as it will take to execute that plan.
In contrast, if the confidential information relates to a complicated business process that the discloser intends to follow for the foreseeable future, the term should last for a number of years.
5. Lay Out Terms in the Event of a Breach of the Agreement
A solid nondisclosure agreement should spell out exactly what happens if the party you give your confidential information to shares that information with others.
In many situations, monetary damages will not be sufficient because you really want your secrets to remain secret. So the typical remedies clause (i.e., how a breach will be addressed legally) is one that calls for “injunctive relief.”
Basically, this allows you to ask a court to immediately stop the dissemination of confidential information through an injunction.
While seeking this sort of relief can be burdensome without such a clause, the process will be more efficient if the right contract language is in place.
A Standard Nondisclosure Agreement That’s Up to Your High Standards
These days, many people are tempted to just download any old NDA off the Internet and put it to use for their business. This is a risky proposition, however, as many of those “template” agreements omit some of these critical clauses I’ve just mentioned.
If you have questions about developing a solid nondisclosure agreement, please feel free to contact me today!
What Went Down In November
Goodbye, Europe; Hello, Puerto Rico
September and October were both huge travel months for us – with the exception of 10 days in September, we were traveling around Europe the entire time!
For a recap on the places we visited, you can check out our travel journal here!
In November, we found our way back to Puerto Rico via Lisbon, Portugal: our final destination on our 60-day Euro Adventure.
Lisbon was an incredible stop – so beautiful!
During our stay we learned a lot about the history there – most of which hinged on the 1776 earthquake and the tsunami that followed, wiping out basically the entire city.
With plenty of castles to explore, museums to visit, parks to stroll through, and Lime Scooters to zip around on, we thoroughly enjoyed our time in Lisbon!
On November 6 we said goodbye to Europe and made our way back to the EOFire studios in Puerto Rico.
While it took us a few days to get back into the swing of things, I’d say overall our transition back home was super smooth.
With loads of lessons learned to absorb from our trip, plus a few big projects we needed to get wrapped up at the house before our “hosting binge” began, the remainder of November kind of felt like it was on fast-forward!
But we made it happen! We hosted several great friends in November, including one of my best friends and her family from San Diego, and then one of our neighbors here in Puerto Rico (but a neighbor who isn’t living here right now), Mark.
To hear more about our lessons learned from the trip, be sure to check out our Lessons Learned section at the end of this month’s income report!
100 Day Goal Journal
We’ve hit some pretty incredible milestones here at Entrepreneurs On Fire. We even have an EOFire timeline to celebrate these great accomplishments!
But in November, we celebrated another BIG milestone that we’ve never celebrated before: Sterling Publishing helped us create and publish the 100 Day Goal Journal and it launched it in Barnes and Nobles stores across the States and in Canada!
The opportunity was presented earlier this year when a rep from Sterling reached out to John and asked what he thought about creating a goal-oriented Journal that would be marketed and sold in book stores.
That sounded pretty awesome, and so after a lot of back-and-forth and collaboration, we are so excited to see the Journal on the shelf.
Now you might be wondering, “How is this different from The Freedom Journal?”
The 100 Day Goal Journal is a combination of the goal-setting focus from The Freedom Journal with the daily focus and accountability prompts from The Mastery Journal.
While The Freedom Journal and The Mastery Journal aren’t going anywhere, the 100 Day Goal Journal gave us a unique opportunity to publish a Journal with a reputable publishing company backing it – and helping us get it into actual book stores.
Great opportunity, great visibility, and we can’t wait to see how it’s received!
The 100 Day Goal Journal is also available on Amazon!
Product/Service Income: $106,648
TOTAL Journal sales: 360 Journals for a total of $12,894
The Freedom Journal: Accomplish your #1 goal in 100 days!
- TheFreedomJournal.com: $580 (16 Hardcovers & 3 Digital Packs)
- Amazon: $6,240 (173 Freedom Journals sold!)
- Total: $6,820
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- TheMasteryJournal.com: $578 (19 Hardcovers & 1 Digital Packs)
- Amazon: $4,173 (116 Mastery Journals sold!)
- Total: $4,751
The Podcast Journal: Idea to Launch in 50 Days!
- ThePodcastJournal.com: $294 (11 Hardcovers & Digital Pack)
- Amazon: $1,029 (21 Podcast Journals sold!)
- Total: $1,323
Puerto Palooza: $15,000 (In-person Mastermind in Puerto Rico, Feb 2019!)
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $23,260 (175 monthly)
- New members: $4,419 (27 new members)
- Total: $27,679
Real Revenue: Turn your BIG IDEA into Real Revenue
- New members: $325
The Revenue Crew: An Elite Mastermind ON FIRE!
- Currently closed to new members
Podcast Sponsorship Income: $45,500
Podcast Websites: $5,000 Your all-in-one podcast website peace of mind
Free Courses that result in the above revenue:
Your Big Idea: Discover your big idea in under an hour!
Free Podcast Course: Create and launch your own podcast!
Free Goals Course: Set & accomplishing your biggest goals!
Funnel On Fire: Create a funnel that converts!
Affiliate Income: $37,974
*Affiliate links below – if you click on my affiliate link and sign up for the products and services I trust and recommend, then I will earn a commission.
Resources for Entrepreneurs: $24,430
- Audible: $164
- BlueHost: $600 Step-by-step guide and 23 WordPress tutorials included! Disclaimer: This is my affiliate link and I will receive a commission if you sign up through my link
- Click Funnels: $21,871
- Coaching referrals: $1,361 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- ConvertKit: $125
- Disclaimer Template: $73 (legal disclaimers for your website)
- Fizzle Mastermind: $174
- Virtual Staff Finder: $62
Courses for Entrepreneurs: $10,235
- Create Awesome Online Courses by DSG: $2,570
- Webinars that Convert by Amy Porterfield: $824
- ASK by Ryan Levesque: $1,496
- Bio Hacking Secrets by Anthony Diclementi: $460
- Boost Blog Traffic by Jon Morrow: $1,890
- Facebook Masters by Manuel Suarez: $2,995
- Opesta by Ethan Sigmon: $0
Resources for Podcasters: $1,879
- Pat Flynn’s Smart Podcast Player: $0
- Podcasting Press: $666
- Tim Paige’s Make My Intro: $0
- Libsyn: $1,128 (Use promo code FIRE for the rest of this month & next free!)
- UDemy Podcasting Course: $85
Other Resources: $1,430
- Amazon Associates: $380
- Other: $1,050
Total Gross Income in November: $144,622
Business Expenses: $22,900
- Advertising: $0
- Affiliate Commissions (Paradise): $1,037
- Accounting: $350
- Cost of goods sold: $3,248
- Design & Branding: $0
- Education: $515
- Legal & Professional: $0
- Meals & Entertainment: $595
- Merchant / bank fees: $1,869
- Amazon fees: $5,789
- PayPal fees: $694
- Shopify fees: $266
- Office expenses: $492
- Community Refunds: $1,785
- Promotional: $104
- The Freedom, Mastery & Podcast Journal: $0
- Travel: $2,836
- Virtual Assistant Fees: $3,245
- Website Fees: $75
Recurring, Subscription-based Expenses: $3,034
- Adobe Creative Cloud: $100
- Boomerang: $60 (team package)
- Bonjoro: $45
- Authorize.net: $70
- Cell Phone: $358
- Google Suite: $50
- GoSpiffy: $250 (annual fee)
- Internet: $80
- eVoice: $10
- Infusionsoft CRM: $309
- Insurance: $648
- Libsyn: $160
- Chatroll: $49
- Shopify: $214
- Sumo: $29
- TaxJar: $19
- Taxes & Licenses: $523
- Zapier: $15
- Xero: $30
- Zoom: $15
Total Expenses in November: $25,934
Payroll to John & Kate: $15,900
Wondering what we do with all of our net revenue? We share all in our April 2017 Income Report :)
Total Net Profit for November 2018: $118,688
Biggest Lesson Learned
Seeing your business (and life) through a new lens
During our 60-day Euro Adventure every day was brand new.
While we tried our best to keep most of our good habits rolling, it wasn’t like we were at home with an alarm clock going off at 6am, followed by a workout, followed by morning coffee and a shower and office time.
Every day was different, with its own set of unique places to see and people to interact with.
It was unexpected – definitely not planned – but our lack of routine actually helped me discover and learn a lot, not just about our business setup, but also about me – personally.
It was like I had the opportunity to see everything through a new lens, and that’s one thing I love about travel so much.
And so I thought it’d be valuable to share a few of my lessons learned from our time away…
Lesson 1: Our business is set up to RUN
We know our business is set up pretty darn well. We attend conferences, travel for a week or 10 days at a time, and with just a little bit of upkeep here and there our business still does its thing.
We even took two weeks off, completely unplugged, to travel Europe back in 2014. Our business didn’t sink, so that’s a good thing.
But this time was different. This time we proved to ourselves that our business is not just set up pretty darn well – it’s set up to RUN… by itself.
We spent 2 days legitimately working while we were in Europe. Two days.
The other 58 we spent an hour – maybe 1.5 hours – on upkeep. Checking email, jumping on social media, and making sure our team was set up for success.
We barely touched the business, and honestly, when it comes to our bottom line and our connection to our audience, and us keeping up on our promise to our customers – nothing changed.
That’s an incredible feeling, and makes you think pretty hard about what you do when you’re at home working 8 hours a day… it has really forced me to consider how much of my time spent working when at home is productive and meaningful for the business.
I have 4 other lessons learned – each of which I’ll be describing in detail (as done above) – in this future post :)
I hope these lessons are helpful for you, and at the very least get you thinking about what it might look like for you to take a step back and perhaps look at your business – even your life – from a new lens.
Alright Fire Nation, that’s a wrap!
Until next month, keep your FIRE burning!
~ Kate & John
Note: we report our income figures as accurately as possible, but in using reports from a combo of Infusionsoft & Xero to track our product and total income / expenses, they suggest the possibility of a 3 – 5% margin of error.